CEE MARKETS-Crown retreats after Czech central bank chief says no rush to hike


* Czech central banker: rate hike does not have to come this year

* Crown retreats to 26.1/euro, its typical level this summer

* Data, including Czech wages, confirm consumption-fueled growth

* Warsaw leads stocks rebound, dinar steady despite PM comments

BUDAPEST, Sept 5 (Reuters) - The Czech crown weakened slightly on Tuesday after comments by the central bank chief cooled expectations of a rapid rise in interest rates following the highest wage growth figures in a decade. After hawkish comments from two other central bank board members lifted the crown to 26 per euro last week, Governor Jiri Rusnok told reporters that the Czech National Bank (CNB) would not necessarily need to raise interest rates again in 2017.

The crown eased 0.1 percent to 26.1 after his comments, within the range between 26 and 26.2 to which it has held since July. The CNB raised its main rate by 20 basis points to 0.25 percent last month -- the first European Union central bank to increase borrowing costs since 2012. But the crown remains heavily overbought after foreign investors stocked up ahead of the central bank's decision in April to remove a cap on the currency, creating uncertainty over the future direction of the exchange rate. Rusnok spoke on Tuesday after data showed a 7.6 percent year-on-year jump in gross wages in April-June, the biggest quarterly increase since early 2008. Other data released across the EU's east also confirmed that economic growth remains strong, partly driven by robust wage growth as employers compete to keep workers lured by much higher wages in Western countries. Central European currencies were mixed and rangebound. The zloty, firming 0.1 percent, set a six-week high against the euro ahead of the Polish central bank's meeting on Wednesday. Strong growth has not boosted inflation rates above central bank targets in the region, except in the Czech Republic. The Polish bank is expected to keep rates at record lows until late 2018. The dinar was steady even though Prime Minister Ana Brnabic told Reuters that Serbia may not seek a new loan from the International Monetary Fund, and the economy could grow 2.5 percent this year, less than expected. Dealers have said the dinar is likely to weaken later this year, but in the summer season it got support from foreign currency inflows for investments in a shallow currency market. Regional stocks firmed, recovering from Monday's decline caused by risk aversion after a nuclear test in North Korea. Warsaw's bluechip index posted the biggest daily gain, rising one percent, driven by 2.7 percent jump in the shares of copper producer KGHM to six-month highs after copper prices hit a three-year high in London.



Latest Previo Daily Change


bid close change in


Czech crown 26.100 26.086 -0.05% 3.48% 0 0 Hungary 306.25 306.14 -0.04% 0.84% forint 00 00 Polish zloty 4.2350 4.2405 +0.13 3.99%


Romanian leu 4.5985 4.5995 +0.02 -1.38%


Croatian 7.4165 7.4155 -0.01% 1.87%


Serbian 119.57 119.55 -0.02% 3.16% dinar 00 00 Note: daily calculated previo close 1800 change from us at CET


Latest Previo Daily Change


close change in


Prague 1024.2 1026.1 -0.19% +11.1 1 6 3% Budapest 37539. 37465. +0.20 +17.3 71 26 % 0% Warsaw 2544.8 2519.4 +1.01 +30.6 4 2 % 4% Bucharest 8055.7 8028.5 +0.34 +13.7 2 4 % 0% Ljubljana 822.98 818.69 +0.52 +14.6 % 9% Zagreb 1899.3 1902.5 -0.17% -4.79% 5 6 Belgrade 724.79 727.30 -0.35% +1.03


Sofia 709.34 705.70 +0.52 +20.9 % 6%


Yield Yield Spread Daily (bid) change vs change Bund in Czech spread


2-year -0.048 0.171 +069b +18bp ps s 5-year 0.127 0 +047b +0bps


10-year 0.945 0.06 +057b +5bps

ps Poland

2-year 1.7 0.009 +244b +2bps


5-year 2.597 -0.003 +294b +0bps


10-year 3.272 0.005 +290b +0bps



interb ank

Czech Rep <PR 0.63 0.81 0.9 0


Hungary <BU 0.15 0.2 0.24 0.15


Poland <WI 1.78 1.77 1.83 1.73


Note: FRA are for ask quotes prices ******************************************************** *****

(Additional reporting by Aleksandar Vasovic in Belgrade; Editing by Catherine Evans)