November 26, 2019 / 10:12 AM / 11 days ago

CEE MARKETS-Forint slips to record low, leu holds on to gains

    By Jason Hovet and Krisztina  Than
    PRAGUE/BUDAPEST, Nov 26 (Reuters) - The Hungarian forint
slipped to a record low against the euro on Tuesday as the
central bank's easy monetary policy stance, the loosest in
central Europe, kept the currency under pressure.
    Most other central European currencies and stock markets
dipped in early trade as investors shifted from optimism in
U.S.-China trade talks to waiting for more concrete progress.
    The Romanian leu, though, stayed elevated after a
post-election bounce that followed incumbent President Klaus
Iohannis winning a run-off vote on Sunday.

    The forint remained hardest hit by investors,
dropping past an all-time low hit in September to trade as weak
as 336.95 to the euro. By 0928 GMT, the forint was down 0.2% at
336.50. It has lost 4.6% so far this year.
    "The underlying basic reason is monetary policy in Hungary,"
one dealer said.
    The National Bank of Hungary maintained its ultra-loose
policy last week, keeping the base rate at 0.9% and the
overnight deposit rate at minus 0.05%.
    It is sticking to its accommodative stance, especially as
economic growth is expected to slow in Hungary next year from
close to 5% this year. 
    The central bank declined to comment on the forint in an
emailed reply to Reuters questions on Tuesday. It has repeatedly
said it has no exchange rate target.
    "Why would the forint have strengthened? Nothing has
changed, apart from the fact that sentiment in emerging markets
has soured a little," another local dealer said. 
    "So far this is a one way street for the forint (towards
weakening)," the dealer added.
    Other central banks have also held interest rates steady
even as major monetary institutions like the European Central
Bank and U.S. Federal Reserve loosen policy. 
    In the Czech case, rate setters are still debating a
possible hike, although analysts widely expect rate stability
ahead.
    The Czech crown and the Polish zloty
dipped less than 0.1%, both sitting off multi-month highs hit
this month.
    The leu was also relatively flat at 4.775 to the
euro after touching its weakest since January last week. 
    Markets expect the leu to stay on a weaker footing as a new
minority government deals with plugging budget gaps.
    A draft bill on Tuesday showed the consolidated budget
target for 2019 will be raised to 4.3% of gross domestic product
from an initial estimate of 2.8%.
    The budget plan for 2020 will take the consolidated deficit
as close to 3% of GDP as possible, Finance Minister Florin Citu
said on Monday.
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1028              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2019
 EURCZK  Czech     <EURCZK  25.5120  25.5065   -0.02%   +0.76%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  336.500  335.800   -0.21%   -4.58%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.3000   4.2984   -0.04%   -0.24%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7755   4.7750   -0.01%   -2.54%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.4330   7.4353   +0.03%   -0.31%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.600  117.620   +0.02%   +0.60%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2019
 .PX     Prague             1083.40  1084.56   -0.11%   +9.82%
                                          00           
 .BUX    Budapest           43968.5  44314.4   -0.78%   +12.34
                                  9        5                 %
 .WIG20  Warsaw    <.WIG20  2189.71  2197.54   -0.36%   -3.82%
                   >                                   
 .BETI   Buchares           9747.73  9772.01   -0.25%   +32.02
         t                                                   %
 .SBITO  Ljubljan  <.SBITO   897.17   898.76   -0.18%   +11.55
 P       a         P>                                        %
 .CRBEX  Zagreb    <.CRBEX  2003.64  1993.75   +0.50%   +14.57
                   >                                         %
 .BELEX  Belgrade  <.BELEX   764.77   764.77   +0.00%   +0.40%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   548.25   548.62   -0.07%   -7.77%
                   >                                   
                            BONDS                             
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   1.4250  -0.0200   +206bp    -2bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.2980   0.0920   +190bp   +10bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.4920   0.0100   +185bp    +2bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   1.3900  -0.0140   +202bp    -1bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.7680  -0.0210   +237bp    -1bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.0390  -0.0130   +240bp    +0bps
 =RR     10-year   =RR>                             s  
                   FORWARD  RATE     AGREEME                  
                                     NT                
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     2.24     2.24     2.15     2.18
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.23     0.25     0.29     0.18
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     1.73     1.71     1.66     1.71
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
         ********************************************         
         ******************                            
                                                              
 
    

 (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest
and Luiza Ilie in Bucharest; Editing by Jan Harvey)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below