CEE MARKETS-Zloty plunges as Polish central bank head downplays rate hike chance


* Polish central bank holds fire, lowers inflation forecasts

* Zloty loss deepens as cbank chief says no rate hike before 2020

* Polish currency falls to this year's weakest versus euro

* CEE assets mixed, investors pick cheap stocks

(Recasts with Polish central bank decision and comments) BUDAPEST, March 7 (Reuters) - The zloty plunged against the euro and its Central European peer, the forint, as the governor of Poland's central bank said its first interest rate increase might come a year later than he earlier expected. At a meeting today, the bank held rates at record lows and trimmed its inflation forecasts for this year and next. Governor Adam Glapinski said he expected rates to remain stable all this year and next. The decisions were not surprising, but it was unexpected that Glapinski moved the date of the first possible rate increase later by one year. His comments turned a fall of the zloty into a plunge. It eased through 75 forints, the most liquid currency in the region after the zloty, in the previous session, and set a six-week low at 73.97 on Wednesday. Cross-trade in the two regional currencies may have contributed to an easing of the zloty against the euro and the opposite movement by the forint. The zloty shed 0.6 percent versus the euro by 1624 GMT to 4.2115, hitting its weakest level since the middle of December. The forint gained 0.2 percent to 312.1, after touching a two-week high at 311.65. Poland's two-year government bond yield dropped 3 basis points to 1.60 percent. Neither the Hungarian or the Polish central banks have been worried that the region's fast economic growth, driven by a tight labor market, big wage increases and a rise in consumption, could boost inflation this year. Regional asset prices were mixed on Wednesday as most investors continued to watch wobbles in the global market. Equities in the region mostly rebounded earlier this week, after a retreating in the past month. They were mixed on Wednesday as fears of a possible trade war grew after a White House advocate for free trade resigned. Investors still picked some stocks which got cheaper during last month's sell-off, like Hungarian oil group MOL and Poland's biggest clothing retailer, LPP. Austrian-based Erste bank led Czech shares lower, shedding 1.4 percent, after reaching its highest levels for almost 10 years on Tuesday.



Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.4310 25.4000 -0.12% +0.44% crown > Hungary <EURHUF= 312.1000 312.7200 +0.20% -0.38% forint > Polish <EURPLN= 4.2115 4.1875 -0.57% -0.83% zloty > Romanian <EURRON= 4.6635 4.6640 +0.01% +0.35% leu > Croatian <EURHRK= 7.4290 7.4275 -0.02% +0.02% kuna > Serbian <EURRSD= 118.0000 118.0600 +0.05% +0.42% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1112.98 1120.960 -0.71% +3.23%


Budapest 38186.20 38008.47 +0.47% -3.02% Warsaw 2359.57 2339.51 +0.86% -4.13% Bucharest 8443.16 8432.84 +0.12% +8.89% Ljubljana <.SBITOP 809.49 810.46 -0.12% +0.39% > Zagreb 1851.65 1846.35 +0.29% +0.48% Belgrade <.BELEX1 741.74 748.01 -0.84% -2.38%


Sofia 687.42 681.67 +0.84% +1.47%


Yield Yield Spread Daily (bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 0.8450 -0.0160 +138bps -2bps


5-year <CZ5YT=R 1.2660 0.0000 +122bps +0bps


10-year <CZ10YT= 1.9450 -0.0080 +129bps +1bps

RR> Poland

2-year <PL2YT=R 1.6050 -0.0270 +214bps -3bps


5-year <PL5YT=R 2.5420 -0.0050 +250bps -1bps


10-year <PL10YT= 3.2850 -0.0440 +263bps -3bps




3x6 6x9 9x12 3M

interban k

Czech Rep 0.97 1.09 1.24 0.91



Hungary 0.09 0.12 0.18 0.02 Poland 1.76 1.77 1.83 1.72

Note: FRA are for ask prices quotes



(Additional reporting by Marcin Goclowski in Warsaw, editing by Larry King)