PRAGUE, Feb 23 (Reuters) - Emerging European Union central
banks coordinated on Monday to prop up their currencies, with
Czech central bank Governor Zdenek Tuma saying they had agreed
recent falls were overplayed.
The Czech crown <EURCZK=>, Hungarian forint <EURHUF=> and
Polish zloty <EURPLN=> all jumped around 1 percent following the
coordinated verbal intervention.
* For Czech cbank comments []
* For Polish []
* For Hungarian []
* For Romanian []
MIROSLAV PLOJHAR, EMEA ECONOMIST, JP MORGAN
"A joint verbal intervention, as is obvious, has a quite big
impact with regard to the fact that bets were fairly one-sided,
so the impact is likely to continue in the coming days."
"On the other hand, the question is how much really the
currencies are far from their fundamentals... the crown seems
closer to its fundamental level than for example the Polish
zloty. The Romanian leu, the Hungarian forint were not much off
(the fundamental value)."
"Some reasons that led investors to sell regional
currencies, mainly concerns for the banking sector that does not
concern the Czech Republic at all, were over-exaggerated."
"But since car sales are falling in Europe faster and faster
we can see an impact in the economy... I don't think this is a
final turn around in the currencies."
PAUL MCNAMARA, EMERGING MARKETS FUND MANAGER, JULIUS BAER
"All central banks in the region are concerned at the speed
of their currency depreciation. The Poles have been particularly
complacent and the Czechs to a lesser degree."
"But the last two weeks have been a wake-up call. Both the
zloty and the Czech crown have been oversold and today's bounce
has more to do with short-squeezing than any market conclusion
that these countries have the ammunition to intervene... None of
the countries in the region have the resources to throw money to
support their currencies."
BARTOSZ PAWLOWSKI, STRATEGIST, TD SECURITIES, LONDON:
"All this supports the argument that the central banks have
finally started responding to the crisis and that implied
volatility could subside in the coming weeks."
"We don't believe that this solves the problem completely
but it is an important step to restoring normality, especially
if the ECB or the European Commission back these efforts."
RODERICK NGOTHO, EMEA STRATEGIST, UBS, LONDON
"It does not come as a surprise that central banks in
Eastern Europe are expressing concern about FX volatility. The
depreciation of some currencies in the region has clearly been
accelerated by exogenous factors, and in this is with reference
to the zloty."
"FX exposure of corporates and/or households is more an
issue for some, than others. Hungary and Romania have a higher
FX loans as a percent of GDP than Poland, and Czech Republic is
in a better position in comparison."
"It will be interesting to see how feasible coordinated
action is, given that the FX exposure of the economies in
Eastern Europe vary, and that the economies have relatively
different fundamental positions."
MARTIN BLUM, HEAD OF EEMEA ECONOMICS, UNICREDIT VIENNA
"We do need to see these words backed by hard action, but
this is a concerted defence by the central banks of their
currencies, and the Czechs are saying they would consider rate
hikes."
"It's a good sign that the countries are speaking together,
they have been a little bit too relaxed previously. The size of
the market reaction suggests that part of the recent weakening
was a little speculative."
RAFFAELLA TENCONI, CEE ECONOMIST, WOOD & CO., LONDON.
"These comments are positive; they signal that there is
increasing amount of coordination among central and Eastern
European countries, more importantly among EU member states."
"(We) have seen increasing signs the EU is really focusing
now on the relationship between the euro zone and eastern Europe
and how this relation can turn detrimental for both sides."
"In terms of the market, a verbal intervention is
short-lived if it's not backed by an actual measures."
"It positive but it does not necessarily mean that if they
only do that you will suddenly see a wave of appreciation
everywhere."
LARS CHRISTENSEN, ECONOMIST, DANSKE BANK
"There is apparently coordinated action on the CEE
currencies now - or rather the central banks in the region are
all out saying that the sell-off in the CEE currencies have been
excessive and out of line with fundamentals. The comments have
lifted the currencies. We will see whether this is sustainable
or not."
"Until now there has been put no money into the coordinated
verbal intervention. This is of course a clear signal that the
CEE central banks are very concerned about the situation and
will try to curb the sell of in the currencies."
"We doubt that verbal intervention is enough and the central
banks in the region might need to hike rates - or get outside
help for example from the ECB. That said, this should at least
in the short-term give some relieve to the CEE currencies."
"We would be looking for possible comments from the ECB on
this issue. Furthermore, the markets might try to test whether
this is just verbal intervention or whether the central banks of
CEE will be willing to for example hike rates."
AGATA URBANSKA, SENIOR ECONOMIST, ING, LONDON
"A good move in the environment of lack of confidence,
though Hungary with its latest -0.5% year-on-year growth in
2010 is less obviously an undervalued currency than PLN or CZK,
not mentioning Romania where we see the currency weakness as
reflecting fundamental shortcomings."
ANDRZEJ BOWTRUCZUK, FX DEALER, COMMERZBANK'S BRE, WARSAW
"The zloty is gaining thanks to improvement of sentiment on
the global markets. The statement on cooperation of the region's
central banks fit nicely into the situation, strengthening the
currencies."
TOMAS VLK, ANALYST, PATRIA FINANCE, PRAGUE
"The impact on the crown is positive. Also the forint and
the zloty appreciated and this is how the comment was meant of
course."
"Markets have been speculating about a coordinated move as
part of the region, at least some verbal interventions."
"As for the rates, this is the second significant voice
saying rates could go up, which cannot be ignored, although at
the moment the Czech economic fundamentals still point to
lowering rates."
(Reporting from Reuters CEE bureaus; Editing by Michael
Winfrey)
