CEE MARKETS-FX strengthens as market sees rates staying high

By Alan Charlish WARSAW, March 1 (Reuters) - Central European currencies firmed on Wednesday, with the Czech crown again hitting its highest since 2008 as high interest rates in the region coupled with a backdrop of falling gas prices and increased global optimism tempted investors. Expectations that borrowing costs in the region will remain high this year were boosted on Tuesday when the National Bank of Hungary (NBH) decided to leave the European Union's highest benchmark interest rate steady at 13%, defying government pressure to cut the cost of credit. "Given the backdrop of seemingly improving global economic growth, emerging market currencies are a juicy target for investors, especially those that have high interest rates like the Hungarian forint and the PLN," said Piotr Bartkiewicz, an economist at Pekao. At 1026 GMT the Hungarian forint was 0.99% firmer against the euro at 374.70, its strongest in nearly 10 months. The Czech crown strengthened 0.27% to 23.4310. "The main reason, in our view, is the renewed decline in gas prices and the testing of new lows," ING said in a note, adding that it did not see the crown's gains as sustainable as interest rates in core markets continue to rise. The Polish zloty was 0.27% firmer at 4.6935. Stocks rose across the region, with the main index in Prague climbing 0.88% to a fresh one-year high.

The index has climbed over 18% so far in 2023 behind a 35% rise in shares for utility CEZ as investors await a possible restructuring by the state, CEZ's main shareholder.

CEE SNAPSHO AT

MARKETS T 1126

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.4310 23.4950 +0.27% +3.10% = crown =>
EURHUF Hungary <EURHUF 374.700 378.400 +0.99% +6.60% = forint => 0 0
EURPLN Polish <EURPLN 4.6935 4.7060 +0.27% -0.08% = zloty =>
EURRON Romanian <EURRON 4.9240 4.9242 +0.00% +0.38% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.240 117.325 +0.07% +0.05% = dinar => 0 0

Note: calcula 1800

daily ted CET

change from

Latest Previou Daily Change s

close change in 2023 .PX Prague 1426.14 1413.69 +0.88% +18.67 00 % .BUX Budapest 45055.7 44780.0 +0.62% +2.88% 7 7
.WIG20 Warsaw <.WIG20 1866.77 1847.94 +1.02% +4.17% >
.BETI Buchares 12344.9 12310.4 +0.28% +5.84% t 4 4
.SBITO Ljubljan <.SBITO 1196.79 1194.89 +0.16% +14.11 P a P> % .BELEX Belgrade <.BELEX 875.65 876.22 -0.07% +6.19% 15 15>
.SOFIX Sofia <.SOFIX 629.30 628.85 +0.07% +4.62% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.7880 -0.2760 +258bp -36bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.2960 0.0260 +248bp -7bps RR RR> s
CZ10YT <CZ10YT 4.9810 0.0340 +227bp -5bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.3440 0.0530 +313bp -3bps RR RR> s
PL5YT= 5-year <PL5YT= 6.5560 0.0650 +374bp -3bps RR RR> s
PL10YT <PL10YT 6.6370 0.0800 +392bp +0bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.22 7.12 6.64 7.20 Rep ><PRIBO

R=>

Hungary <HUFFRA 15.00 13.53 12.13 16.29 ><BUBOR

Poland <PLNFRA 7.02 7.07 6.85 6.94 ><WIBOR

Note: are for

FRA ask

quotes prices

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

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(Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague and Gergely Szakacs in Budapest; Editing by Shounak Dasgupta)

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