CEE MARKETS-Romania's leu firms slightly ahead of central bank rate decision

By Luiza Ilie and Pawel Florkiewicz BUDAPEST, April 4 (Reuters) - The Romanian leu firmed 0.1% in morning trade ahead of a rate-setting meeting by the National Bank of Romania, where policy makers are unanimously expected to keep the benchmark interest rate on hold at 7% for the second month in a row. Economists expect the NBR to leave borrowing costs unchanged throughout 2023, though some analysts say the bank could strike a hawkish tone after Tuesday's meeting amid the Romanian economy's resilience compared with its central European peers. Policymakers across the region are counting on a gradual slowdown in price growth in the first half before a sharper drop later this year and are guiding steady interest rates for now. "The RON has come under pressure recently, reaching NBR intervention levels for the first time since the beginning of the year. It is possible that the central bank will have to return to hawkish communication and be more aggressive in the FX market," economists at ING said in a note. Central bank Governor Isarescu has said rate cuts will likely not happen before interest rate levels and inflation meet. He also said a firmer leu would not help lower inflation sustainably and that Romania's soaring external deficit needed to be corrected gradually, possibly through a weaker currency.

In February, the central bank forecast inflation will reach 7% in December. Since then, inflation has slightly exceeded expectations. Analysts see inflation at 7.4% in December. The Polish zloty , the region's most liquid currency, was a touch weaker in rangebound trade, with investors focusing on comments by central bank Governor Adam Glapinski on the policy outlook following March inflation figures. Polish headline inflation slowed to 16.2% year-on-year in March, falling from a likely peak but not as fast as expected, according to preliminary data published last week. Economists polled by Reuters expect the National Bank of Poland to leave its main rate steady at 6.75% at a policy meeting on Wednesday. "A. Glapinski's comments will be particularly interesting in the light of recent inflation data, and thus the prospects for monetary policy in Poland," Bank Millennium said in a note.

CEE SNAPSHO AT

MARKETS T 0959

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURHUF Hungary <EURHUF 377.150 377.500 +0.09% +5.91% = forint => 0 0
EURPLN Polish <EURPLN 4.6765 4.6740 -0.05% +0.28% = zloty =>
EURRON Romanian <EURRON 4.9335 4.9385 +0.10% +0.18% = leu =>
EURRSD Serbian <EURRSD 117.200 117.265 +0.06% +0.09% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1364.24 1354.85 +0.69% +13.52 00 % .BUX Budapest 43718.8 42991.4 +1.69% -0.17% 8 4
.WIG20 Warsaw <.WIG20 1779.52 1775.99 +0.20% -0.70% >
.BETI Buchares 12252.6 12232.2 +0.17% +5.05% t 4 6
.SBITO Ljubljan <.SBITO 1196.21 1194.67 +0.13% +14.06 P a P> % .CRBEX Zagreb <.CRBEX 2232.43 2236.13 -0.17% +749.5 > 8% .BELEX Belgrade <.BELEX 885.07 888.04 -0.33% +7.33% 15 15>
.SOFIX Sofia <.SOFIX 609.10 610.93 -0.30% +1.27% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.7940 0.0380 +311bp +1bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.0140 -0.0060 +272bp -4bps RR RR> s
CZ10YT <CZ10YT 4.6020 -0.0160 +233bp -5bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.0450 -0.1020 +337bp -13bps RR RR> s
PL5YT= 5-year <PL5YT= 5.9900 -0.0030 +369bp -3bps RR RR> s
PL10YT <PL10YT 6.0700 0.0190 +380bp -1bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.16 6.82 6.19 7.18 Rep ><PRIBO

R=>

Hungary <HUFFRA 15.08 13.28 11.94 16.30 ><BUBOR

=>

Poland <PLNFRA 6.88 6.78 6.35 6.90 ><WIBOR

=>

Note: are for ask

FRA prices

quotes

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(Reporting by Pawel Florkiewicz, Luiza Ilie and Krisztina Than; Editing by Subhranshu Sahu Writing by Gergely Szakacs Editing by)

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