BUDAPEST: Central European stocks rose and most of the region's currencies firmed slightly on Monday, benefiting from rising risk appetite in the wake of strong US jobs data late last week.
Bucharest led equity gains, with its main index rising by 0.9 percent by 1317 GMT.
The dinar was steady after Serbia kept its main interest rate, the highest in the region, at 4 percent as expected.
After announcing its decision, the central bank sold dinar in the market, dealers said, to prevent a firming through the 120 psychological level against the euro which it has been testing since Friday when it hit 20-month highs.
The dinar was trading at 120.08 at 1317 GMT, staying near the high despite the intervention by the bank, which has purchased around 530 million euros ($604 million) so far this
year.
An interest rate cut could weaken the dinar, but the bank fears a cut could hit appetite for dinar-denominated securities in a period when monetary policy tightening by the world's main central banks is a key risk.
The dinar could come under pressure soon from uncertainty over the future of Serbia's deal with the IMF, which will expire next year, and possible delays in the restructuring of state-owned firms, Raiffeisen analyst Wolfgang Ernst said in a note.
In a Reuters poll last week analysts saw the dinar retreating to 124 per euro in the next 12 months.
The Czech crown traded at 26.102 against the euro, still near Friday's 26.048 peak, its strongest level since late 2013.
It was buoyed on Friday by data showing robust growth in industrial output and retail sales in May, reflecting the region's solid economic growth. The crown has been strengthening since early April when the Czech central bank removed a cap which had kept it weaker than 27 for years.
Before the exit, the bank sold crowns worth tens of billions of euros in the market to defend the cap, boosting its foreign currency reserves.
Czech end-June reserve figures released on Monday showed a further rise last month, to 124.89 billion euros from a revised 124.01 billion euros in May, while the central bank said it did not sell or buy any foreign currency in the spot market in May.
Hungarian and Polish long-term government bond yields dropped by a few basis points after a sharp rise in the past two weeks due to hawkish comments from European Central Bank officials.
Comments
Comments are closed for this article.