PRAGUE, Feb 23 (Reuters) - Emerging European Union central
banks coordinated on Monday to prop up their currencies, with
Czech central bank Governor Zdenek Tuma saying they had agreed
recent falls were overplayed.
Currencies immediately jumped, with the Polish zloty gaining
2 percent, and the Czech crown adding to gains just before
Tuma's comments to rise another 0.6 percent to 28.085 per euro.
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RAFFAELLA TENCONI, CEE ECONOMIST, WOOD & CO., LONDON.
"These comments are positive; they signal that there is
increasing amount of coordination among central and Eastern
European countries, more importantly among EU member states."
"(We) have seen increasing signs the EU is really focusing
now on the relationship between the euro zone and eastern Europe
and how this relation can turn detrimental for both sides."
"In terms of the market, a verbal intervention is
short-lived if it's not backed by an actual measures."
"It positive but it does not necessarily mean that if they
only do that you will suddenly see a wave of appreciation
everywhere."
LARS CHRISTENSEN, ECONOMIST, DANSKE BANK
"There is apparently coordinated action on the CEE
currencies now - or rather the central banks in the region are
all out saying that the sell-off in the CEE currencies have been
excessive and out of line with fundamentals. The comments have
lifted the currencies. We will see whether this is sustainable
or not."
"Until now there has been put no money into the coordinated
verbal intervention. This is of course a clear signal that the
CEE central banks are very concerned about the situation and
will try to curb the sell of in the currencies."
"We doubt that verbal intervention is enough and the central
banks in the region might need to hike rates - or get outside
help for example from the ECB. That said, this should at least
in the short-term give some relieve to the CEE currencies."
"We would be looking for possible comments from the ECB on
this issue. Furthermore, the markets might try to test whether
this is just verbal intervention or whether the central banks of
CEE will be willing to for example hike rates."
AGATA URBANSKA, SENIOR ECONOMIST, ING, LONDON
"A good move in the environment of lack of confidence,
though Hungary with its latest -0.5% year-on-year growth in
2010 is less obviously an undervalued currency than PLN or CZK,
not mentioning Romania where we see the currency weakness as
reflecting fundamental shortcomings."
ANDRZEJ BOWTRUCZUK, FX DEALER, COMMERZBANK'S BRE, WARSAW
"The zloty is gaining thanks to improvement of sentiment on
the global markets. The statement on cooperation of the region's
central banks fit nicely into the situation, strengthening the
currencies."
TOMAS VLK, ANALYST, PATRIA FINANCE, PRAGUE
"The impact on the crown is positive. Also the forint and
the zloty appreciated and this is how the comment was meant of
course."
"Markets have been speculating about a coordinated move as
part of the region, at least some verbal interventions."
"As for the rates, this is the second significant voice
saying rates could go up, which cannot be ignored, although at
the moment the Czech economic fundamentals still point to
lowering rates."
(Reporting from Reuters CEE bureaus; Editing by Michael
Winfrey)
