PRAGUE — The Czech crown rose on Friday
to its highest level since Feb. 21 as markets took in the
central bank’s latest rate hike, while Hungary’s forint pushed
higher before a closely watched election.
Central European markets generally drifted with worry over
the Russia-Ukraine conflict still high. But stock markets in the
region bucked global weakness and climbed, with Prague
near 1-month highs.
The forint edged up to 367.80 to the euro before
an election on Sunday when Prime Minister Viktor Orban faces a
united oppisition for the first time since he came to power in
According to the latest polls, Orban’s ruling Fidesz party
has a narrow lead over the opposition alliance.
The crown was the main currency mover on Friday,
rising 0.2% on the day to 24.40 to the euro by 1004 GMT. It
touched a session high of 24.31 earlier.
The currency has had limited reaction to a Thursday interest
rate hike that brought the base Czech rate to 5.00%, its highest
since 2001 as the central bank kept up its fight against
With prices set to rise further amid fallout from Russia’s
invasion of Ukraine, the Czech National Bank (CNB) said it was
ready to continue raising rates.
Markets see scope for further rises, although growth worries
– after the central bank said on Thursday this year’s growth
outlook of 3% could be cut in half – could limit that room.
“We think the CNB may be too optimistic about GDP growth
now,” Erste Group Bank said.
“Thus, if lower growth materializes, it could become less
hawkish. Altogether, due to the current hawkish communication of
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