KBC Market Research Desk
KBC Bank
Central European currencies notched mixed results in Wednesday trading. While the koruna strengthened against the euro, both the zloty and the forint weakened. The koruna gained about 0.5 % against the euro despite CNB Vicegovernor Tomsk’s admission that the central bank might change the length of its pledge to keep koruna above EUR/CZK 27.0 floor. Recall that a CNB Board meeting is scheduled for the next Thursday and that the recent economic developments in the euro area may prod central bankers into prolonging their exchange rate commitment.
Meanwhile in Poland, banks’ shares soared after the Economy ministry (EM) had published a proposal that should help households repay their mortgages denominated in Swiss francs (CHF). The Ministry appealed to banks to enable households to convert their CHF debts to zlotys (at the current CHF/PLN rate and free of charge), to take into account negative LIBOR rates, and to declare a threeyear loan repayment holiday. The proposed measures have provided certain relief to market participants that had been worried of even less favorable (from the banks’ perspective) conditions. Let us recall that there had been rumors about obligatory conversion of the CHF-denominated housing loans at rates effective before the sharp appreciation of the CHF in mid January. Since then, the zloty fell by about 15 % against the CHF.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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