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


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


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


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%.






Last previous daily change


auction close change in


EURCZK Czech 0 0%

EURHUF Hungary 00 00%

Polish EURPLN %

EURRON Romania % %

EURHRK Croatia % %

Serbian EURRSD 00 00 % %

Note: calculated from 1800

CET daily


Last previous daily change


close change in


.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



CZ2YT= 0 ps

CZ5YT= 0 ps

CZ10YT 0 ps


PL2YT= 0 ps

PL5YT= 0 ps

PL10YT 0 ps


3×6 6×9 9×12 3M


thank you




Note: are to be requested

FRA rates




(Additional reporting by Jason Hovet in Prague; editing by

Shounak Dasgupta)



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