CEE MARKETS-Forint holds near nine-month peak as cenbank defies pressure to cut interest rates

(Updates after Hungary central bank rate decision) By Jason Hovet and Gergely Szakacs PRAGUE, Feb 28 (Reuters) - The Czech crown jumped the most since August and touched a more than 14-year high on Tuesday, while the forint firmed after Hungary's central bank held steady on rates and signalled a hawkish stance despite government calls for easier policy. Currencies have been on a winning streak so far in 2023 as central bank policies remain tight even as extremely high inflation chokes economies, pushing some countries such as Hungary and the Czech Republic into technical recession. Hungarian Prime Minister Viktor Orban's top economic aide piled pressure on the central bank on Tuesday to start lowering interest rates, saying current borrowing costs were "extremely onerous" for the economy. The bank, though, as expected, held all its interest rates steady, including the European Union's highest benchmark at 13%, and said it would tighten liquidity conditions further. The forint has gained close to 6% so far in 2023, supported by high rates and hopes of EU funds being unlocked from a rule-of-law dispute with Brussels. The forint was flat on Tuesday, recouping some earlier losses and holding on the strong side of 380 per euro. "I can only hope that the NBH starts lowering interest rates as soon as possible and will not remain overly cautious," Economic Development Minister Marton Nagy, a former central bank deputy governor, was quoted as saying by news website index.hu earlier on Tuesday. "Unfortunately, for now, there is no sign of easing. Moreover, monetary conditions are being tightened." Elsewhere, the Czech crown gained 0.6% to trade beyond 23.50 to the euro for the first time since July 2008. The currency was supported by producer price data surprising on the upside, along with end-of-month trading. "It looks like some fixing flow went through," a Prague trader said. Stock markets recovered some losses during the day. Prague's index rose, boosted by shares in dual-listed Erste Group Bank following estimate-beating results.

CEE SNAPSHO AT

MARKETS T 1626

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.4910 23.6270 +0.58% +2.84% = crown =>
EURHUF Hungary <EURHUF 377.650 377.650 +0.00% +5.77% = forint => 0 0
EURPLN Polish <EURPLN 4.7100 4.7160 +0.13% -0.43% = zloty =>
EURRON Romanian <EURRON 4.9220 4.9245 +0.05% +0.42% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.220 117.295 +0.06% +0.07% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1413.69 1402.73 +0.78% +17.64 00 % .BUX Budapest 44949.0 44940.0 +0.02% +2.64% 4 3
.WIG20 Warsaw <.WIG20 1844.20 1820.79 +1.29% +2.91% >
.BETI Buchares 12311.6 12307.5 +0.03% +5.56% t 4 1
.SBITO Ljubljan <.SBITO 1191.90 1202.44 -0.88% +13.64 P a P> % .BELEX Belgrade <.BELEX 876.22 878.85 -0.30% +6.26% 15 15>
.SOFIX Sofia <.SOFIX 628.85 626.30 +0.41% +4.55% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.9520 -0.2070 +280bp -29bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.2700 0.0360 +251bp -6bps RR RR> s
CZ10YT <CZ10YT 4.9500 0.0980 +228bp +1bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.2790 -0.1550 +313bp -24bps RR RR> s
PL5YT= 5-year <PL5YT= 6.4640 -0.0450 +371bp -14bps RR RR> s
PL10YT <PL10YT 6.5360 -0.0230 +386bp -11bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.21 7.09 6.59 7.20 Rep ><PRIBO

R=>

Hungary <HUFFRA 15.00 13.53 12.13 16.28 ><BUBOR

Poland <PLNFRA 6.99 7.01 6.74 6.94 ><WIBOR

Note: are for ask

FRA prices

quotes

********************************************

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(Reporting by Jason Hovet in Prague and Gergely Szakacs in Budapest; Editing by Mark Potter and Shounak Dasgupta)

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CEE MARKETS-Forint holds near nine-month peak as cenbank defies pressure to cut interest rates

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