But on Thursday, Credit Suisse said it would borrow up to $54 billion from Switzerland's central bank to shore up liquidity and investor confidence, restoring some calm, though the turmoil heightened market uncertainty about the European Central Bank's rate decision.
By 0945 GMT, the forint was up 1.1% against the euro at 396.45. The unit fell more than 2% on Wednesday, breaching 400 per euro for the first time since mid-January, its weakening amplified by low liquidity due to a market holiday. The forint remains vulnerable due to uncertainty over the release of European Union recovery funds, and to growing tensions between the Hungarian central bank and the government, with the latter advocating lower interest rates as the economy weakens.
Hungary's base rate is the highest in the European Union as the bank battles inflation that is hovering above 20%. "The forint has firmed this morning (after yesterday's slide) as sentiment seems to have calmed somewhat with the Swiss central bank throwing a lifeline to Credit Suisse," a trader in Budapest said.
He added the forint would likely remain volatile in relative illiquid trading, in a range between 390 and 400 to the euro. "This situation means the high interest rates in Hungary will stay," he said. Elsewhere in the region, the Polish zloty and the Czech crown were up 0.2% and 0.1% against the euro, respectively, while the Romanian leu edged 0.1% down.
Romanian banks are well capitalized and the central bank sees no risk of contagion at the moment, board member Cristian Popa said on Thursday.
Speaking of the Credit Suisse funding line, Popa told television station Digi24 that "markets salute these kinds of actions coming from regulators and it looks like today will be more positive than the developments we saw yesterday." Stocks across central and eastern Europe were mixed. Prague's blue chip index was up 1.6% on the day, while Bucharest’s rose 0.8%, with Romanian banks BRD-Socgen and Banca Transilvania shares up 0.2% and 0.5%, respectively.
Meanwhile, Warsaw’s eased 0.4%, while Budapest’s fell 1.2%. Shares in Hungary’s OTP Bank were down 2.1%.
CEE SNAPSHO AT
MARKETS T 1117
CET
CURRENC
IES
Latest Previou Daily Change s
bid close change in 2023
Czech <EURCZK= 23.9510 24.0070 +0.23% +0.86%
crown >
Hungary <EURHUF= 395.650 400.700 +1.28% +0.96%
forint > 0 0
Polish <EURPLN= 4.6990 4.7075 +0.18% -0.20%
zloty >
Romanian <EURRON= 4.9200 4.9151 -0.10% +0.46%
leu >
Croatian <EURHRK= 7.5330 7.5365 +0.05% +0.05%
kuna >
Serbian <EURRSD= 117.240 117.300 +0.05% +0.05%
dinar > 0 0
Note: calculated from 1800
daily CET
change
Latest Previou Daily Change s
close change in 2023
Prague 1331.32 1312.14 +1.46% +10.78
00 %
Budapest 41317.9 41807.2 -1.17% -5.65%
2 9
Warsaw 1697.34 1707.42 -0.59% -5.28%
Buchares 12315.7 12215.8 +0.82% +5.59%
t 4 6
Ljubljan <.SBITOP 1180.22 1179.66 +0.05% +12.53
a > %
Zagreb 2221.14 2218.30 +0.13% +745.2
8%
Belgrade <.BELEX1 891.73 892.05 -0.04% +8.14%
5>
Sofia 621.83 621.93 -0.02% +3.38%
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
2-year <CZ2YT=R 5.3400 -0.1260 +274bp -35bps
R> s
5-year <CZ5YT=R 4.8950 0.0200 +257bp -19bps
R> s
<CZ10YT= 4.6100 0.0970 +233bp -6bps
10-year RR> s
Poland
2-year <PL2YT=R 5.9560 -0.0330 +335bp -25bps
R> s
5-year <PL5YT=R 5.9920 0.0440 +367bp -16bps
R> s
<PL10YT= 6.0940 0.0500 +382bp -11bps 10-year RR> s
FORWARD
3x6 6x9 9x12 3M interba nk Czech 7.02 6.69 6.11 7.20 Rep <PRIBOR=
>
Hungary 14.95 13.29 12.08 16.30 Poland 6.78 6.58 6.10 6.92 Note: are for ask
FRA prices
quotes
*********************************************
*****************
(Reporting by Luiza Ilie in Bucharest, Krisztina Than in Budapest and Alan Charlish in Warsaw; Editing by Tomasz Janowski)
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