CEE MARKETS-Forint supported by steady interest rates, Czech yields climb further

Bank Millennium SA

19/11/2025 10:09

PRAGUE, Nov 19 (Reuters) - The Hungarian forint climbed on Wednesday, keeping its support as the country's central bank extended a more than year-long pause in interest rate cuts.

Czech 10-year bond yields inched up further and have climbed 30 basis points in the past month; the spread over German peers is at the highest since April 2024. Hungarian yields have also risen this month, pushed higher after the government raised its budget deficit targets.

On FX markets, though, the Czech and Hungarian currencies were around new highs, with  both countries' central banks keeping interest rates in place as they pause easing cycles started in 2023.

In Hungary, the forint EURHUF= inched up to 383.60 to the euro, clinging near a 1-1/2-year high of 383.10.

The Hungarian central bank left its base rate steady at the European Union's joint-highest level of 6.5% on Tuesday amid fiscal loosening, high inflation expectations and uncertainty over the inflation outlook following next year's parliamentary election.

TIGHT POLICY NEEDED

It reiterated its message that tight policy was needed.

"The central bank's communication is very credible, and the fact that the forint firms even when the dollar is strengthening proves this," a trader in Budapest said, adding that there have been only weak attempts by the market to break past the 383.50 technical level.

The Czech central bank also left its main rate on hold, at 3.50%, this month and most analysts expect steady rates going into next year.

The crown EURCZK= was steady at 24.185 to the euro in early trade, down a second day in a row after touching a 26-month high of 24.145 on Monday when local markets were closed for a holiday.

In Poland, the zloty EURPLN= edged down to 4.240 per euro, falling a third day back near the centre of a range it has stuck to since April. It briefly hit 4.2205 on Monday, a seven-month high.

Bank Millennium said scope for further weakening was limited and markets will take their cue from U.S. Federal Reserve minutes due out later on Wednesday as investors weigh up chances of U.S rate cuts.

The dollar, whose weakness against the euro this year has added to support for central European currencies, fluctuated on Wednesday with investors looking for safety amid a global selloff in stocks caused by nerves over AI valuations.

Central European bourses, which have hit record or multi-year highs, have fallen from peaks reached last week.

CEE MARKETS SNAPSHOT AT 1033 CET
CURRENCIES
Latest trade
Previous close
Daily change
Change in 2025
Czech crown
EURCZK=
24.1850
24.1870
+0.01%
+4.23%
Hungary forint
EURHUF=
383.6000
383.8000
+0.05%
+7.25%
Polish zloty
EURPLN=
4.2420
4.2410
-0.02%
+0.82%
Romanian leu
EURRON=
5.0890
5.0877
-0.03%
-2.21%
Serbian dinar
EURRSD=
117.0800
117.2400
+0.14%
-0.11%
Note: daily change calculated from 1800 CET
STOCKS
Latest
Previous close
Daily change
Change in 2025
Prague
.PX
2448.13
2444.9000
+0.13%
+39.08%
Budapest
.BUX
106396.18
106072.63
+0.31%
+34.12%
Warsaw
.WIG20
2906.27
2903.10
+0.11%
+32.58%
Bucharest
.BETI
23503.21
23449.96
+0.23%
+40.56%
BONDS
Yield (bid)
Yield change
Spread vs Bund
Daily change in spread
Czech Rep 2-year
CZ2YT=RR
3.6560
0.0610
+164bps
+6bps
Czech Rep 5-year
CZ5YT=RR
4.0840
0.0070
+179bps
+1bps
Czech Rep 10-year
CZ10YT=RR
4.6310
0.0040
+192bps
+0bps
Poland 2-year
PL2YT=RR
4.2200
-0.0720
+220bps
-7bps
Poland 5-year
PL5YT=RR
4.7240
-0.0090
+243bps
-1bps
Poland 10-year
PL10YT=RR
5.3290
-0.0170
+262bps
-2bps
FORWARD RATE AGREEMENTS
3x6
6x9
9x12
3M interbank
Czech Rep
CZKFRA, PRIBOR=
3.62
3.65
3.71
3.55
Poland
PLNFRA, WIBOR=
3.88
3.71
3.67
4.26
Note: FRA quotes are for ask prices

 (Reporting by Jason Hovet in Prague, editing by Ed Osmond)

 ((breaking-news-cee@thomsonreuters.com))