The forint is stable as markets expect another rate hike from Cenbank
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BUDAPEST — The Hungarian forint was
little changed on Tuesday in low liquidity as markets eyed a
central bank rate meeting later in the day when the bank was
should further increase the base rate to bring the outbreak under control
inflation.
The forint edged up 0.04% and traded at
398.80 for one euro before the meeting of the National Bank of
Hungary (NBH), where a Reuters poll of analysts expects a base
rate hike of 100 basis points to 10.75%.
The NBH will announce its decision at 12:00 GMT.
« Even if the bank offers a 100 basis point hike, I don’t
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think the forint will strengthen significantly,” a forex trader from
said Budapest. “Rate hikes put out the fire, but for the forint
to really strengthen the country needs to get EU funds.
The currency rebounded from a record low of 416.90
earlier this month after the central bank raised its rate by a week
deposit rate from 200 basis points to 9.75% on July 7 and a few
days later, its base rate also, also 200 basis points for
9.75%.
The forint was also helped by government measures aimed at
stabilize the budget, but the absence of an agreement with the
European Union on pandemic recovery funds featured prominently
currency, traders and analysts said.
Yields on long-term government bonds remained stable ahead of the
NBH meeting, said a fixed-income trader in Budapest. The yield
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on the 10-year bond was around 8.09%.
Long-term yields have fallen about 100 basis points in the past
two weeks as the forint strengthened.
« This trend may soon come to an end and yields may recover as
rate hikes won’t be enough to make investors optimistic
inflation is also high,” the trader said.
Core inflation jumped to 13.8% year on year in June in
Hungary.
Elsewhere, the Czech koruna slipped 0.07% to 24.588
per euro, as new central bank board member Jan Frait told Reuters
that he would consider either keeping rates steady or a small
increase when the board meets on August 4.
The Polish zloty added 0.16% to trade at 4.7125
per euro and the Romanian leu was stable.
Most stocks in the region eased, with Warsaw
leading the losses as it lost 0.96%. The Budapest Stock Index
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weakened 0.38%, while Prague shares were down 0.31%.
SNAPSHOT EEC AT
OT MARKETS 1014
HEC
CURRENT
CIES
Last previous daily change
we
auction close change in
2022
EURCZK Czech
EURHUF Hungary
Polish EURPLN
EURRON Romania
EURHRK Croatia
Serbian EURRSD
Note: calculated from 1800
CET daily
change
Last previous daily change
we
close change in
2022
.PX Prague 1236.5 1240.3 -0.31%
0 100
.BUX Budapest 41567. 41725. -0.38% -18.05
t 54 26%
.WIG20 Warsaw <.wig20> 5 2%
.BETI Bucaré 12305. 12251. +0.44 -5.78%
80 73%
.SBITO Ljublja <.sbito p na> 9 6 % %
.CRBEX Zagreb <.crbex> 8 4
.BELEX Belgrade <.belex e> % %
.SOFIX Sofia <.sofix>
Yield Yield Daily Difference
(bidding) change vs change
Bund in
Czech spread
Republic
vs
CZ2YT=
CZ5YT=
CZ10YT
Poland
PL2YT=
PL5YT=
PL10YT
FORWARD
3×6 6×9 9×12 3M
interb
thank you
Czech
Hungary
Poland
Note: are to be requested
FRA rates
quotation
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(Additional reporting by Jason Hovet in Prague; editing by
Shounak Dasgupta)
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