WARSAW: Central European currencies were a touch stronger in early trade on Wednesday, recovering from the recently sour investor sentiment that spread through the markets after the IMF cut its global growth forecasts.
The International Monetary Fund said earlier in the week that the global economic slowdown was worsening and it expected growth in central and eastern Europe to more than halve to 2.0 percent this year, and rise to only 2.6 percent in 2013.
Dealers said, however, that following weakness related to the forecast, Wednesday's session was likely to be calmer.
"Things are relatively quiet in the region today, volatility is at a low level," said Karol Zaluski, chief currency dealer at ING Bank in Warsaw.
At 0747 GMT, the zloty, the Hungarian forint and the Czech crown were 0.1 percent stronger against the euro each.
Poland's zloty, the region's most liquid currency, has been stable since the central bank surprised markets last Wednesday and kept interest rates flat at 4.75 percent, defying expectations that it would slash borrowing costs to help the ailing economy.
Dealers ay investors need more clues on the rate outlook to decide what direction the zloty should take.
The Romanian leu was up 0.2 percent, marking the biggest change among the region's currencies on the back of inflation accelerating above the central bank's target and effectively reducing the scope for interest rates cuts needed by the languishing economy.
The Serbian dinar could also stand out on Wednesday and continue to its rise following the decision of its central bank to increase borrowing costs on Tuesday.
Serbia's central bank raised its benchmark interest rate by 25 basis points to 10.75 percent, surprising some in the market who had expected rates to stay on hold and underpinning the dinar currency.
Comments
Comments are closed for this article.