CEE MARKETS – Forint leads CEE currencies higher following central bank emergency measures
BUDAPEST, October 20 (Reuters) – The Hungarian forint led Central European currencies higher on Thursday, benefiting from the central bank’s daily tenders and the announcement that it will provide foreign currency for the payment of energy bills.
The measures are part of the National Bank of Hungary’s (NBH) emergency measures announced last Friday when it raised interest rates and said it would hold a tender for a fast deposit facility. NBHK3 offered at a fixed interest rate of 18% on a daily basis to support the rolling forint. The bank offers the deposit again on Thursday. NBHK3
The BNH also said it would start providing foreign currency from its international reserves to finance energy imports from Thursday, also aiming to ease pressure on the forint. He said his new tools will remain in place until Hungary’s risk assessment improves significantly.
After a decline across the region on Wednesday, the forint regained momentum on Thursday morning.
“They offered the deposit again at 18% today, so the forint gained in the morning,” said a currency dealer in Budapest.
“They will probably maintain these measures to prevent a sale of forints until we get an agreement on EU funds.”
the forint EURHUF= was up half a percent at 411.30 against the euro around 0800 GMT, moving further away from record lows set at 430 against the euro last week before the emergency rate hike.
For the forint and Hungarian assets to stabilize sustainably, reaching an agreement with the European Union on the release of European funds remained a key factor that investors are following very closely, according to analysts.
Hungary to offer three sets of government bonds at auction on Thursday HOUSE.
Elsewhere, the Polish zloty EURPLN= rose 0.1% to 4.7925 per euro.
“The zloty resisted yesterday’s EUR/USD correction quite well. The EUR/PLN exchange rate remains close to 4.80,” ING bank said in a note. “If the mood of the markets improves at the turn of the week and the appreciation of the dollar stops, the exchange rate of the zloty against the euro should again fall below 4.80.”
ING said a deterioration in the trade balance could keep the zloty under pressure.
“We also don’t expect the NBP to respond to lofty expectations for further interest rate hikes, across money market rates,” he added.
In October, the National Bank of Poland (NBP) kept its main interest rate at 6.75%, opting to leave borrowing costs unchanged despite soaring inflation, as it warned against an impending economic downturn.
Stock markets were mixed with the Warsaw blue chip index .WIG20 up 0.3% and Budapest .BUX trading down 0.7%.
At 1004 CET
lei in Romanian
Note: daily change
+411 basis points
+680 basis points
+8 basis points
+652 basis points
+12 basis points
+609 basis points
+11 basis points
Note: ENG Quotes
are for asking prices
************************************************** **** ***********
(Reporting by Krisztina Than in Budapest and Pawel Florkiewicz; Editing by Kim Coghill)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.