WARSAW, March 8 (Reuters) - Central European currencies were
mixed in early trade on Tuesday, with the forint rising after
one of Hungary's newly appointed central bankers said interest
rates should stay on hold for some time.
Hungary's ruling Fidesz party put two economists on the
country's Monetary Policy Council on Monday. The vast majority
of analysts had anticipated the government nominations would
give the council a looser policy bias. []
The comments by new MPC member Ferenc Gerhardt stressed the
need to combat inflation, casting doubt on that assumption.
"The comments were clearly market friendly and based on
their background they sound reasonable," said Elisabeth Andrew,
FX analyst at Nordea. "But again, we must also have in mind that
we don't know yet how (the new appointees) actually will vote."
Two further MPC appointments are pending.
Data released on Monday showed Hungary's budget deficit
surged to 81.4 percent of the full-year plan after February.
The economy ministry said the full-year target of 2.94
percent of GDP was still achievable as proceeds from the sale of
private pension assets and crisis taxes would boost state
coffers in the second half, but market participants said the
data could add to market pressure.
"None of this is verifiable until detailed figures are
released later in March," analysts at RBC wrote in a note.
"Nevertheless, these data could cause some nerves in the short
term."
By 0815 GMT, the forint <EURHUF=> was 0.5 percent against
the euro, traded at 270.68.
The region's other currencies mostly hovered around their
previous closing levels, with the Czech crown <EURCZK=> and the
Polish zloty <EURPLN=> virtually flat against the common
currency and Romania's leu <EURRON=> some 0.1 percent stronger.
In Poland, a member of the central bank's Monetary Policy
Council told daily Nasz Dziennik the MPC would hit economic
growth and the labour market if it raised interest rates and
would still fail to curb externally-driven inflation.
[]
Newly published voting records from the last four months of
2010 showed policymakers in Poland were split on whether to
increase rates. Central bank governor Marek Belka used his vote
to block motions for a rate hike each time.
Poland raised rates in January by 25 basis points after
Belka signalled concern over inflation.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.181 24.171 -0.04% +3.39%
Polish zloty <EURPLN=> 3.97 3.971 +0.03% -0.3%
Hungarian forint <EURHUF=> 270.68 272 +0.49% +2.7%
Croatian kuna <EURHRK=> 7.401 7.405 +0.05% -0.28%
Romanian leu <EURRON=> 4.191 4.194 +0.07% +1%
Serbian dinar <EURRSD=> 103.44 103.32 -0.12% +2.4%
*Benchmark is German bond equivalent.
All data taken from Reuters at 0915 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz; Editing by John Stonestreet)
