CEE MARKETS-Forint remains weakened with eyes on c.bank, zloty ride continues

By Jason Hovet PRAGUE, April 24 (Reuters) - The forint stayed weakened on Monday after the central bank had flagged a cut at the top end of its interest rate corridor ahead of a meeting this week, while other central European currencies gained slightly. Hungary's central bank could, on Tuesday, be the first to begin undoing some of the tight policy put in place in the past two years to contain strong inflation. Deputy Governor Barnabas Virag told business website vg.hu last week the bank could cut its 25% top collateralised loan rate next week as part of a "multi-step process" towards policy normalisation, which analysts saw as testing the water before more easing. The forint was down 0.3% at 377.25 to the euro at 0817 GMT. It had firmed last week to a one-year high beyond 370 before Virag's comments gave the market a jolt. The loan rate is the top of the central bank's corridor used to guide interbank markets toward the policy rate, setting limits on rate-setting. The bottom rate, used for overnight deposits, stands at 12.5%. The bank also has an 18% one-day deposit rate which has helped attract money flows and boosted the forint, which had touched record lows a half-year ago. "We believe that the upper bound could be cut by 250bp, from 25% to 22.5% this week, and lowering of the one-day deposit rate could start in May with a 100bp cut," said Erste Group Bank. Elsewhere, the Czech crown rose 0.25% to 23.452 per euro and Polish zloty inched up 0.1% at 4.6085, hanging around a 10-month high. The zloty, after trailing gains seen this year by its Czech and Hungarian peers, has jumped in the past week as rate cut expectations fade. Analysts, though, are cautious on how much the zloty can rise further, especially with a stabilising U.S. dollar - whose weakness is often a boost for emerging market currencies.

CEE SNAPSHO AT

MARKETS T 1017

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.4520 23.5100 +0.25% +3.01% = crown =>
EURHUF Hungary <EURHUF 377.250 376.000 -0.33% +5.88% = forint => 0 0
EURPLN Polish <EURPLN 4.6085 4.6120 +0.08% +1.76% = zloty =>
EURRON Romanian <EURRON 4.9295 4.9360 +0.13% +0.26% = leu =>
EURRSD Serbian <EURRSD 117.200 117.270 +0.06% +0.09% = dinar => 0 0

Note: calcula 1800

daily ted CET

change from

Latest Previou Daily Change s

close change in 2023 .PX Prague 1423.26 1417.04 +0.44% +18.43 00 % .BUX Budapest 44040.6 44100.8 -0.14% +0.56% 0 7
.WIG20 Warsaw <.WIG20 1896.04 1900.63 -0.24% +5.81% >
.BETI Buchares 12427.2 12396.7 +0.25% +6.55% t 5 0
.SBITO Ljubljan <.SBITO 1231.70 1233.85 -0.17% +17.44 P a P> % .BELEX Belgrade <.BELEX 890.71 893.45 -0.31% +8.02% 15 15>
.SOFIX Sofia <.SOFIX 607.86 608.95 -0.18% +1.06% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.7950 0.0780 +288bp +9bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.1440 -0.0100 +264bp +1bps RR RR> s
CZ10YT <CZ10YT 4.7690 -0.0230 +231bp +0bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.0740 -0.1310 +316bp -12bps RR RR> s
PL5YT= 5-year <PL5YT= 6.0540 -0.0150 +355bp +1bps RR RR> s
PL10YT <PL10YT 6.0450 -0.0330 +358bp -1bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.22 6.91 6.26 7.17 Rep ><PRIBO

R=>

Hungary <HUFFRA 14.86 12.99 11.84 16.25 ><BUBOR

Poland <PLNFRA 6.83 6.69 6.37 6.90 ><WIBOR

Note: are for

FRA ask

quotes prices

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

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(Reporting by Jason Hovet in Prague, Boldizsar Gyori in Budapest and Karol Badohal in Warsaw; Editing by Krishna Chandra Eluri)

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CEE MARKETS-Forint remains weakened with eyes on c.bank, zloty ride continues

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