WARSAW, Dec 4 (Reuters) - The crown extended gains after
the Czech central bank governor flagged a probable pause in
monetary easing, while the zloty was flat ahead of a Polish
interest rate decision later on Wednesday.
The Czech National Bank (CNB) is very likely to pause
interest rate cuts soon, opting for stability and assessing new
forecasts with the aim of lowering core inflation in future to
slightly below 2%, Governor Ales Michl said.
The central bank has cut rates at consecutive meetings since
December 2023, taking its key rate to 4.00% from a more than
two-decade high of 7.00%.
At 0931 GMT, the crown was up 0.2% against the
euro at 25.1310, after hitting its strongest level since late
September at 25.11 in early trading.
"Czech Governor Michl's comments were actually in line with
his previous statements, as Governor Michl belongs to that part
of the CNB Board which adopted a cautious approach to further
interest rate cuts," Radomir Jac, chief economist at Generali
Investments CEE, said.
Czech wage data for the third quarter released on Wednesday
"support the case of a pause in the cycle of rate cuts at the
CNB's upcoming monetary policy meeting on December 19", he said,
adding he expected a resumption of easing in the first quarter
of 2025 with a 25 basis point cut in each quarter of next year.
"Today's news - wage statistics and Governor Michl's
comments - can be seen as factors, which contributed to further
slight CZK gains this morning," Jac said.
All analysts polled by Reuters expect the National Bank of
Poland (NBP) to keep rates on hold later on Wednesday. It has
kept its benchmark rate at 5.75% since a surprise easing in
autumn 2023.
PKO BP analysts pointed to developments since the last
rate-setting meeting, including Poland's decision to extend an
energy price cap into 2025, as well as weak private consumption
data and the zloty's recovery since the Nov. 5 U.S. elections.
"In our opinion, the arguments for a rate cut are growing,
but we still expect them to remain unchanged," they wrote in a
note.
"Such a decision will be consistent with the statements of
the (Monetary Policy) Council members, who still indicate March
2025 as the first moment to consider rate cuts."
The zloty was flat at 4.2915 per euro, on the
stronger side of the 4.30 psychological level it returned to
last week.
In Hungary, the forint also steadied against the
euro, trading at 414.50, near its weakest level since December
2022, having fallen last week after credit rating agency Moody's
revised the country's outlook to "negative" from "stable".
CEE SNAPSHOT AT
MARKETS 1031 CET
CURRENCI
ES
Latest Previous Daily Change
trade close change in 2024
Czech 25.1310 25.1715 +0.16% -1.71%
crown
Hungary 414.5000 414.5200 +0.00% -7.55%
forint
Polish 4.2915 4.2913 -0.00% +1.23%
zloty
Romanian 4.9775 4.9773 -0.00% -0.06%
leu
Serbian 116.8800 116.9600 +0.07% +0.31%
dinar
Note: calculated from 1800 CET
daily
change
Latest Previous Daily Change
close change in 2024
Prague 1702.82 1707.610 -0.28% +20.42%
0
Budapest 78804.49 77690.26 +1.43% +30.00%
Warsaw 2265.14 2240.58 +1.10% -3.32%
Bucharest 15708.48 16060.28 -2.19% +2.19%
Spread Daily
vs Bund change
in
Czech spread
Republic
2-year 5-year 10-year Poland
2-year 5-year 10-year FORWARD
3x6 6x9 9x12 3M
interban
k
Czech Rep Hungary Poland Note: FRA are for ask prices
quotes
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(Reporting by Karol Badohal in Warsaw, Anita Komuves in
Budapest, Jason Hovet in Prague. Editing by Mark Potter)
Line of Credit 
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