CEE MARKETS-Forint drops as Hungary central banker signals slower rate hikes
PRAGUE, May 24 (Reuters) - The forint dropped on Tuesday as a Hungarian central banker reiterated the pace of interest rate hikes would slow, while the Czech crown also pulled back from recent gains amid more signs strong inflation is weighing on consumer demand.
Stocks in central Europe also mostly eased, falling with European peers as slowing growth concerns weighed on markets.
Inflation around the region has hit multi-decade highs and is still on the rise, even after sharp interest rate hikes from central European policymakers since last year.
The crown has been shaken by a new central bank governor due to take over from July, Ales Michl, who has already called for an end of rate hikes after 550 basis points in increases since last June.
On Tuesday, Hungarian central bank Deputy Governor Barnabas Virag was cited as saying that could slow down the pace of rate rises to about half of the 100 basis point steps delivered in the past two months.
The forint EURHUF= retreated by 0.4% to 383.75 to the euro, coming after several days of gains.
"Nobody thought the central bank would keep hiking rates by 100 basis points," one FX trader said.
"However, the forint will weaken a bit on this piece of news. My rate expectations have not really changed in the past one or two months, maybe the pace of how we will get there."
While economies have held up to start 2022, evidenced by solid growth in the first quarter, signs are pointing to a consumer slowdown amid fast-rising prices and utility bills, rising interest rates and growing uncertainty even as fighting in Ukraine continues.
Czech consumer confidence hit a 10-year low in May, a statistics office survey showed on Tuesday.
The crown EURCZK= fell 0.2% to 24.679 per euro, while Poland's zloty EURPLN= managed a 0.15% rise and Romania's leu EURRON= was steady.
Stock markets were led lower by a 0.8% drop in Warsaw .WIG20.
CEE MARKETS
SNAPSHOT
AT 1127 CET
CURRENCIES
Previous
bid
change
in 2022
EURCZK=
Czech crown
EURCZK=
EURHUF=
Hungary forint
EURHUF=
383.7500
382.1500
EURPLN=
Polish zloty
EURPLN=
EURRON=
Romanian leu
EURRON=
EURHRK=
Croatian kuna
EURHRK=
EURRSD=
Serbian dinar
EURRSD=
Note: daily change
calculated from
1800 CET
Previous
close
change
in 2022
.PX
.PX
#VALUE!
.BUX
Budapest
.BUX
.WIG20
.WIG20
.BETI
Bucharest
.BETI
.SBITOP
Ljubljana
.SBITOP
.CRBEX
.CRBEX
.BELEX15
Belgrade
.BELEX15
.SOFIX
.SOFIX
(bid)
change in
Czech Republic
CZ2YT=RR
CZ2YT=RR
+503bps
CZ5YT=RR
CZ5YT=RR
+421bps
+6bps
CZ10YT=RR
10-year
CZ10YT=RR
+371bps
PL2YT=RR
PL2YT=RR
+584bps
PL5YT=RR
PL5YT=RR
+606bps
+8bps
PL10YT=RR
10-year
PL10YT=RR
+556bps
+4bps
3M interbank
Note: FRA quotes
are for ask prices
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(Reporting by Jason Hovet in Prague, Anita Komuves in Budapest and Alan Charlish in Warsaw; Editing by Krishna Chandra Eluri)
((jason.hovet@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.