CEE MARKETS-Forint drops as Hungary central banker signals slower rate hikes

·3 min read

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 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 fell 0.2% to 24.679 per euro, while Poland's zloty managed a 0.15% rise and Romania's leu was steady. Stock markets were led lower by a 0.8% drop in Warsaw . CEE SNAPSHO AT MARKETS T 1127 CET CURRENC IES Latest Previou Daily Change s bid close change in 2022 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2022 .PX Prague 1314.47 1322.71 -0.62% #VALUE! 00 .BUX Budapest 43477.4 43457.5 +0.05% -14.28% 0 8 .WIG20 Warsaw <.WIG20 1821.54 1836.87 -0.83% -19.65% > .BETI Buchares 12302.1 12182.3 +0.98% -5.81% t 0 3 .SBITO Ljubljan <.SBITO 1143.71 1149.07 -0.47% -8.90% P a P> .CRBEX Zagreb <.CRBEX 2089.08 2090.25 -0.06% +0.47% > .BELEX Belgrade <.BELEX 816.30 815.90 +0.05% -0.55% 15 15> .SOFIX Sofia <.SOFIX 614.46 614.46 +0.00% -3.34% > Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year s CZ5YT= 5-year s CZ10YT s Poland PL2YT= 2-year s PL5YT= 5-year s PL10YT s FORWARD 3x6 6x9 9x12 3M interba nk Czech Hungary Poland Note: are for ask FRA prices quotes ******************************************** ****************** (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest and Alan Charlish in Warsaw; Editing by Krishna Chandra Eluri)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting