WARSAW, Jan 12 (Reuters) - Central European currencies were
little changed early on Wednesday, though the Polish zloty
briefly touched rates around 3.85 against the euro where the
central bank has previously stepped in to cool its gains.
The zloty <EURPLN=> has gained almost 3 percent against the
euro since the start of 2011 as a batch of monetary
policymakers, including central bank governor Marek Belka,
called for a quick start to a cycle of interest rate rises.
Andrzej Bratkowski, a long-time supporter of rate rises on
the 10-strong Monetary Policy Council (MPC), on Tuesday said a
rate rise should come this month and that the bank could raise
rates by a total of up to 150 basis points in this cycle. The
MPC holds its next meeting on Jan. 18-19. []
"The market is bullish on the comments on interest rate
increases and we see lots of foreign investors entering the
market," said one Warsaw-based dealer.
The dealer added that he did not expect the central bank to
intervene on the FX market even if the unit breaches the 3.85
level at which an intervention took place last April.
Then, the bank surprised markets with its first and so far
only bought of buying since introducing a free float in 2000 as
it tried to limit the impact of the currency's surge on exports
and the wider economy.
By 0820 GMT on Wednesday, the zloty was some 0.1 percent
down against the euro. Other currencies also hovered around
previous closing levels, with Hungary's forint <EURHUF=> down
some 0.2 percent, the Czech crown <EURCZK=> down by some 0.1
percent and Romania's leu <EURRON=> up 0.1 percent.
The Czech unit has gained some 2.3 percent against the euro
since the beginning of the year and analysts say the crown has
benefited from a string of improving economic and fiscal data
this year.
"We passed the 24.500 level, which was crucial," CSOB dealer
David Sykora said.
"We won't see a massive correction. People I'm speaking
with, not just locals but banks in London and from abroad, are
positive on the crown."
In Hungary one of the central bank's policymakers said the
bank should raise its key interest rate once more but not
necessarily in January. []
Hungary hiked interest rates by half a percentage point in
two moves late last year. Analysts expect Poland to move next,
while the Czech Republic is not expected to begin tightening
monetary policy until mid-2011.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.446 24.42 -0.11% +2.27%
Polish zloty <EURPLN=> 3.854 3.85 -0.1% +2.7%
Hungarian forint <EURHUF=> 277.06 276.63 -0.16% +0.33%
Croatian kuna <EURHRK=> 7.405 7.403 -0.03% -0.34%
Romanian leu <EURRON=> 4.251 4.257 +0.14% -0.42%
Serbian dinar <EURRSD=> 105.5 106.04 +0.51% +0.4%
All data taken from Reuters at 0920 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz;
editing by Patrick Graham)
