Crown eases after widely expected cenbank rate hike



(Updates with Czech rate hike, market reaction)

By Anita Komuves

BUDAPEST, June 22 (Reuters) - The Czech crown eased on Wednesday after the central bank raised the key two-week repo rate by 125 basis points to 7%, continuing its year-long hiking cycle in an attempt to curb soaring inflation.

The crown EURCZK= slid after the decision and was trading 0.21% down on the day at 24.742 versus the euro.

Analysts in a Reuters poll had been largely split on whether the bank would opt for a 100- or 125-basis-point hike, while financial markets had expected a move as big as 150 basis points.

Governor Jiri Rusnok was due to comment on the rate decision at 1345 GMT at a news conference.

This was the last meeting of the CNB before incoming governor Ales Michl takes over. Michl has consistently voted against rate hikes during the central bank's year-long tightening cycle, which has raised the main rate by a total of 550 basis points.

However, his promise of no more rate hikes will be tested right away by surging inflation and a hawkish turn among major central banks.

Elsewhere, currencies and stocks slid, influenced by global markets as concerns about rising interest rates and recession struck again.

The Hungarian forint EURHUF= weakened 0.65% to 397.00 per euro, while the Polish zloty EURPLN= plunged 1.34% to trade at 4.700 versus the common currency.

"Today, a regional source of volatility may be the meeting of the Czech central bank," Bank Millennium wrote.

"Locally, this may also be a source of additional pressure on the Polish Monetary Policy Council, but we do not believe that it is so strong that it could significantly affect the valuation of Polish assets."

Stocks in the central European region slid, with Warsaw's index .WIG20 down 2.71% while Budapest .BUX weakened 2.11%. Prague .PX shed 0.74% and Bucharest .BETI eased 0.61%.

CEE

SNAPSH AT

MARKETS OT

1528

CET

CURREN

CIES

Latest Previo Daily Change

us

bid

close change in

2022 Czech

<EURCZK 24.742 24.690 -0.21% +0.53 crown

=>

0

0

% Hungary <EURHUF 397.00 394.40 -0.65% -6.95% forint =>

00

00

Polish <EURPLN 4.7000 4.6370 -1.34% -2.32% zloty

=>

Romania <EURRON 4.9465 4.9455 -0.02% +0.03 n leu

=>

% Croatia <EURHRK 7.5170 7.5195 +0.03 +0.01 n kuna =>

%

% Serbian <EURRSD 117.30 117.45 +0.13 +0.24 dinar

=>

00

00

%

% Note:

calculated from

1800

daily

CET

change

Latest Previo Daily Change

us

close change in

2022 Prague

.PX

1308.9 1318.7 -0.74%

5

700

Budapes .BUX

40074. 40936. -2.11% -20.99 t

93

77

% Warsaw <.WIG20 1672.4 1719.0 -2.71% -26.23

>

1

5

% Buchare .BETI 12301. 12377. -0.61% -5.82% st

74

09

Ljublja <.SBITO 1131.9 1137.5 -0.49% -9.84% na

P>

5

2

Zagreb <.CRBEX 2006.3 2006.3 +0.00 -3.51%

>

6

6

% Belgrad <.BELEX 831.67 832.97 -0.16% +1.33 e

15>

% Sofia

<.SOFIX 612.03 616.25 -0.68% -3.72%

>

Yield Yield Spread Daily

(bid) change vs

change

Bund

in Czech

spread Republi

c

<CZ2YT= 6.5780 -0.097 +554b +1bps 2-year RR>

0

ps

<CZ5YT= 5.8890 -0.270 +448b -14bps 5-year RR>

0

ps

<CZ10YT 5.4900 -0.278 +387b -14bps 10-year =RR>

0

ps Poland

<PL2YT= 7.7450 -0.322 +671b -22bps 2-year RR>

0

ps

<PL5YT= 7.6630 -0.437 +626b -30bps 5-year RR>

0

ps

<PL10YT 7.2440 -0.485 +562b -34bps 10-year =RR>

0

ps

FORWARD

3x6

6x9

9x12

3M

interb

ank Czech

<CZKFRA

7.51

7.60

7.51

6.67 Rep

><PRIBO

R=>

Hungary <HUFFRA

9.37 10.07 10.07

7.67

><BUBOR

=>

Poland <PLNFRA

8.03

8.22

8.20

6.94

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

****************************************

**********************


Additional reporting by Pawel Florkiewicz in Warsaw; Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise

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