* Rouble, lira woes moderately weigh on forint, zloty
* Polish central bank head says rates may stay low for years
* Polish long-term yields lowest since autumn 2016
* Czech government raises economic growth forecasts
(Recasts with Polish central bank decision and comments)
By Sandor Peto
BUDAPEST, April 11 (Reuters) - Central European stocks and
currencies fell on Wednesday along with other emerging markets
as geopolitical tensions rose.
The region's main equity indexes dropped by 0.1 to 0.2
percent, except for a quarter percent rise in Budapest.
In currency markets, the Polish zloty and
Hungarian forint both eased by 0.1 percent against the
euro by 1523 GMT, and the leu eased 0.15 percent.
The Polish central bank kept interest rates on hold as
expected, and Governor Adam Glapinski said he saw no reason to
change record low interest rates in the next two years.
The zloty briefly gained after he said the currency's
strengthening had not caused problems in the economy. But it
gave up ground as Glapinski said there were no reasons to think
about policy tightening, and that a moment may come when action
in the opposite direction would be advisable.
"We believe that, given recent development of inflation
rate, a rate hike is less and less likely to happen in 2019,"
Erste Group analyst Katarzyna Rzentarzewska said in a note. "We
decided to change our baseline scenario to no policy rate hike
next year as well."
After a surprise decline in Polish annual inflation to 1.3
percent in March, the central bank said inflation would stay
close to its target in the next few years.
Polish 5- and 10-year government bonds were bid at their
lowest yields since autumn 2016. The 10-year yield dipped below
3 percent, to 2.97 percent.
Hungary's 10-year government bond yield dropped by 3 basis
points to 2.38 percent. It has declined by almost 20
basis points since Prime Minister Viktor Orban's Fidesz party
won elections on Sunday, ensuring policy predictability.
"Thursday's auctions could be smoothly sold despite the
lower yields levels," one trader said.
The Czech crown traded steady, bucking the
weakening of its regional peers.
The Czech central bank is expected to continue to raise
interest rates. The Czech Finance Ministry raised its growth
forecasts for this year and next on Wednesday.
CEE SNAPSHOT AT
MARKETS 1723 CET
CURRENCI
ES
Latest Previous Daily Change
bid close change in 2018
Czech <EURCZK= 25.3150 25.3130 -0.01% +0.90%
crown >
Hungary <EURHUF= 311.4400 311.1300 -0.10% -0.17%
forint >
Polish <EURPLN= 4.1900 4.1868 -0.08% -0.33%
zloty >
Romanian <EURRON= 4.6635 4.6565 -0.15% +0.35%
leu >
Croatian <EURHRK= 7.4250 7.4275 +0.03% +0.07%
kuna >
Serbian <EURRSD= 118.2000 118.2200 +0.02% +0.25%
dinar >
Note: calculated from 1800 CET
daily
change
Latest Previous Daily Change
close change in 2018
Prague 1124.03 1125.020 -0.09% +4.25%
0
Budapest 37971.57 37882.42 +0.24% -3.57%
Warsaw 2271.93 2274.81 -0.13% -7.69%
Bucharest 8828.34 8841.74 -0.15% +13.86%
Ljubljana <.SBITOP 829.29 829.92 -0.08% +2.84%
>
Zagreb 1805.03 1811.97 -0.38% -2.05%
Belgrade <.BELEX1 737.79 737.07 +0.10% -2.90%
5>
Sofia 660.64 664.75 -0.62% -2.48%
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
2-year <CZ2YT=R 0.8130 -0.0070 +138bps +0bps
R>
5-year <CZ5YT=R 1.2030 0.0000 +129bps +1bps
R>
10-year <CZ10YT= 1.7760 -0.0120 +128bps +1bps
RR>
Poland
2-year <PL2YT=R 1.5110 -0.0110 +207bps -1bps
R>
5-year <PL5YT=R 2.2420 -0.0400 +233bps -3bps
R>
10-year <PL10YT= 2.9810 -0.0570 +249bps -4bps
RR>
FORWARD RATE AGREEMEN
T
3x6 6x9 9x12 3M
interban
k
Czech Rep 0.95 1.06 1.19 0.90
<PRIBOR=
>
Hungary 0.07 0.10 0.18 0.03
Poland 1.73 1.73 1.76 1.70
Note: FRA are for ask prices
quotes
*************************************************
*************
(Reporting by Sandor Peto, editing by Larry King)