Hungarian forint leads losses ahead of central bank meeting

270
2
Hungarian forint leads losses ahead of central bank meeting

BUCHAREST, Oct 18 Reuters - The Hungarian forint led losses on Monday among central and eastern European currencies, a day ahead of a central bank meeting, while inflation worries and disappointing economic growth in China also sapped global risk sentiment. Hungarian central banks have raised rates four times since June, initially lifting the Forint, but the currency has given up almost all of its gains since policymakers slowed down the pace of rate hikes last month despite higher inflation forecasts. In 0915 GMT the forint was down 0.4% against Euro at 360.9500. The National Bank of Hungary NBH is expected to raise its Base Rate to 1.8% by 15 basis points on Tuesday, a Reuters poll of analysts showed. We expect a 15 basis point hike at tomorrow's meeting, however, we do not exclude the possibility of hawkish communication and an intervention in the swap market due to the forint's weakness, brokerage Equilor wrote in a note. Where in the region, the Polish Crown and Czech Zloty were down 0.3% and 0.2% against the euro, respectively. The rise in Czech producer prices accelerated to almost 10% y y in September, further backed expectations of more interest rate hikes. Trading rates ticked up in early trading. The Romanian duo was flat against the euro, after Moody's changed the country's outlook to negative from negative citing growth prospects backed by private businesses and European Union funds. The country, beleaguered by a sharp rise in COVID 19 cases amid low vaccination rates and a political crisis, is struggling with wide budget and current account deficits and the currency is down 1.7% overall this year, the region's worst performer. Stock markets in the region were mixed, with Budapest's exhibiting 0.2% and 0.1% down, respectively, while Warsaw's rose 0.7% on the day and Bucharest's added 0.2%.