Forint, zloty firm on expectations of more rate hikes to come

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BUDAPEST — The Hungarian forint and the

Polish zloty strengthened on Wednesday, extending their gains

from the previous session supported by expectations for further

rate hikes as central banks face high inflation.

The Hungarian forint was 0.22% higher and trading

at 364.45, adding to its gains from the previous session when it

jumped after the central bank unexpectedly raised interest rates

for the fourth time in just two weeks.

The bank widened its interest rate corridor, making room to


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hike its one-week deposit rate again. It raised the one-week

deposit rate worth a combined 110 basis points over the past two

weeks, raising it to 2.9%. The next weekly one-week deposit

tender is due on Thursday.

“It seems like the market finally trusts that the central

bank is ready to act,” an FX trader in Budapest said.

The forint gained more than 2% since Nov. 23, when it fell

to a record low of 372 per euro.

Hungarian long-term government bond yields were higher on

Wednesday, turning back a drop seen in the previous session.

Yields were tracking a rise in U.S. treasury yields after

U.S. Federal Reserve Chair Jerome Powell said that inflation was

here to stay and indicated a quicker taper of bond purchases,

two fixed-income traders in Budapest said.


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The yield on the 10-year bond was 4.47%, about 12 basis

points higher than after the central bank announcement on


The Polish zloty firmed 0.29% to 4.6500 versus the

common currency, extending gains from the previous session.

The zloty was gaining as higher-than-expected inflation data

published on Tuesday was fueling hopes for more monetary policy

tightening, a trader in Warsaw said.

Poland’s central bank governor, Adam Glapinski said on

Wednesday that there is room to hike interest rates, but it is

not unlimited.

The Czech crown was 0.26% lower, trading at 25.565

to the euro. The currency was affected by continued global

worries over the Omicron variant of the coronavirus, a currency

trader in Prague said.


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Purchasing Managers’ Index (PMI) data in the region showed

that manufacturing sentiment in Poland and the Czech Republic

gained momentum, with output and orders gains offsetting the

impact of supply snags and rising costs.

In Hungary, PMI eased but stayed above the 50 mark dividing

growth from contraction.

Stocks in the region were up, with Warsaw leading

gains by adding 1.37%. Prague was 0.50% higher, while

Budapest added 0.24%.

Markets in Bucharest were closed for a national holiday.






Latest Previou Daily Change


bid close hm in


EURCZK Czech %

EURHUF Hungary 0 0 %

EURPLN Polish %

EURRON Romania %

EURHRK Croatia % %

EURRSD Serbian 0 0 %

Note: calculated from 1800

daily CET


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Latest Previou Daily Change


close change in


.PX Prague 1363.97 1357.22 +0.50 +32.7

00 % 9%

.BUX Budapes 51589.4 51464.6 +0.24 +22.5

t 1 0 % 2%

.WIG20 Warsaw 2224.34 2194.37 +1.37 +12.1

% 2%

.BETI Buchare 12195.6 12195.6 +0.00 +24.3

st 1 1 % 7%

.SBITO Ljublja <.sbitop p na> 5%

.CRBEX Zagreb 1988.25 1981.00 +0.37 +14.3

% 1%

.BELEX Belgrad <.belex1 e> %

.SOFIX Sofia 614.33 622.72 -1.35% +37.2


Yield Yield Spread Daily

(bid) change vs change

Bund in

Czech spread



CZ2YT= ps

CZ5YT= ps

CZ10YT ps


PL2YT= ps s

PL5YT= ps s

PL10YT ps


3×6 6×9 9×12 3M



Czech 3.95 3.98 3.83 3.19


Hungary 4.44 4.55 4.51 3.33

Poland 2.96 3.26 3.25 2.06

Note: are for ask

FRA prices




(Additional reporting by Jason Hovet in Prague and Alan

Charlish in Warsaw; Editing by Shailesh Kuber)



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