* Zloty dips on dovish cbank comments
* Hungary expected to hold rates, end tightening cycle
By Jason Hovet
PRAGUE, Feb 21 (Reuters) - The zloty dipped at the open on
Monday after comments from Poland's central bank governor raised
doubts on the pace of monetary policy tightening, while the
forint was down before Hungary's central bank decides on rates.
Analysts expect Hungary to hold fire on interest rates after
three quarter percentage point rises since November brought the
base rate to 6 percent. []
Poland started tightening policy last month, raising the
main rate to 3.75 percent from a record low. Markets have raised
bets the Monetary Policy Council will follow that with another
rate hike at the council's March meeting. []
On Monday, Governor Marek Belka said the bank should act
with moderation as long as there is no wage pressure and the
January rate rise will not be followed by a "cascade" of further
hikes -- comments that pushed the zloty off session highs.
[]
"Belka put a dampener once again on rate hike expectations
for the coming months," BNP Paribas said in a note. "We could
see some receiving pressure on the FRA curve as hike
expectations are revised."
The zloty <EURPLN=> gave up early gains and dipped 0.1
percent from Friday's close to 3.919 to the euro by 0834 GMT,
while the forint <EURHUF=> lost 0.35 percent.
The Czech crown <EURCZK=> slipped 0.2 percent to hit a
six-week low, and the Romanian leu <EURRON=> was flat.
A dip in central Europe's reference currency the euro and
falling risk appetite amid spreading anti-government protests in
Libya and the Middle East also added pressure on emerging
European currencies.
Concerns over euro zone peripheral Portugal's high budget
deficit also weighed on the market, dealer said.
"These negative factors are more important than positive
news from US companies, which had increased risk appetite on
Friday in the evening," said Piotr Bujak of Bank Zachodni WBK.
In Hungary, the bank will have its last meeting in its
current composition. By March the mandates of four of the
Council's seven rate setters will expire, and parliament is
expected to replace them with dovish economists backed by the
ruling Fidesz party. []
Twenty-six of 27 analysts in a Reuters poll forecast that
the bank will keep interest rates on hold.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.482 24.443 -0.16% +2.12%
Polish zloty <EURPLN=> 3.919 3.915 -0.1% +1.00%
Hungarian forint <EURHUF=> 270.5 269.56 -0.35% +2.77%
Croatian kuna <EURHRK=> 7.405 7.405 0% -0.34%
Romanian leu <EURRON=> 4.239 4.24 +0.02% -0.14%
Serbian dinar <EURRSD=> 103.107 103.1 -0.01% +2.74%
All data taken from Reuters at 0935 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, Writing by Jason Hovet;
Editing by Toby Chopra)
