Central European Daily

CEE currencies were traded with mixed results yesterday. While the Hungarian forint lost 0.4 %, the Polish zloty, supported by state-owned BGK bank´s euro sales, strengthened to its 3 week maximum. The Czech koruna vindicated its position of the most stable regional currency and eased only slightly to 25.55 EUR/CZK. Forint´s losses were caused by both global and domestic factors. Uncertainty surrounding US debt ceiling debate weighed and the forthcoming expiry of ultimatum given by the government to banks regarding conversion of their FX denominated mortgages have been hand in hand undermining position of the most vulnerable regional currency. The state secretary of the Ministry of Economy, Zoltan Csefalvay, told the parliament yesterday that the government was aiming at a solution significantly reducing monthly repayments of foreign currency mortgage holders. According to Csefalvay, the government wants to make the repayments burden predictable and those who had taken FX loans should be put on an equal footing with those who had borrowed in forints. Csefalvay reiterated the threat that if the banks would not come with their proposal by November 1, the government is ready to present a plan of its own. The Hungarian cabinet was criticized for the harsh approach by ECB´s President Mario Draghi.