WARSAW, Dec 4 (Reuters) - The crown extended gains after

the Czech central bank governor flagged a probable pause in

monetary easing, while the zloty was flat ahead of a Polish

interest rate decision later on Wednesday.

The Czech National Bank (CNB) is very likely to pause

interest rate cuts soon, opting for stability and assessing new

forecasts with the aim of lowering core inflation in future to

slightly below 2%, Governor Ales Michl said.

The central bank has cut rates at consecutive meetings since

December 2023, taking its key rate to 4.00% from a more than

two-decade high of 7.00%.

At 0931 GMT, the crown was up 0.2% against the

euro at 25.1310, after hitting its strongest level since late

September at 25.11 in early trading.

"Czech Governor Michl's comments were actually in line with

his previous statements, as Governor Michl belongs to that part

of the CNB Board which adopted a cautious approach to further

interest rate cuts," Radomir Jac, chief economist at Generali

Investments CEE, said.

Czech wage data for the third quarter released on Wednesday

"support the case of a pause in the cycle of rate cuts at the

CNB's upcoming monetary policy meeting on December 19", he said,

adding he expected a resumption of easing in the first quarter

of 2025 with a 25 basis point cut in each quarter of next year.

"Today's news - wage statistics and Governor Michl's

comments - can be seen as factors, which contributed to further

slight CZK gains this morning," Jac said.

All analysts polled by Reuters expect the National Bank of

Poland (NBP) to keep rates on hold later on Wednesday. It has

kept its benchmark rate at 5.75% since a surprise easing in

autumn 2023.

PKO BP analysts pointed to developments since the last

rate-setting meeting, including Poland's decision to extend an

energy price cap into 2025, as well as weak private consumption

data and the zloty's recovery since the Nov. 5 U.S. elections.

"In our opinion, the arguments for a rate cut are growing,

but we still expect them to remain unchanged," they wrote in a

note.

"Such a decision will be consistent with the statements of

the (Monetary Policy) Council members, who still indicate March

2025 as the first moment to consider rate cuts."

The zloty was flat at 4.2915 per euro, on the

stronger side of the 4.30 psychological level it returned to

last week.

In Hungary, the forint also steadied against the

euro, trading at 414.50, near its weakest level since December

2022, having fallen last week after credit rating agency Moody's

revised the country's outlook to "negative" from "stable".

CEE SNAPSHOT AT

MARKETS 1031 CET

CURRENCI

ES

Latest Previous Daily Change

trade close change in 2024

Czech 25.1310 25.1715 +0.16% -1.71%

crown

Hungary 414.5000 414.5200 +0.00% -7.55%

forint

Polish 4.2915 4.2913 -0.00% +1.23%

zloty

Romanian 4.9775 4.9773 -0.00% -0.06%

leu

Serbian 116.8800 116.9600 +0.07% +0.31%

dinar

Note: calculated from 1800 CET

daily

change

Latest Previous Daily Change

close change in 2024

Prague 1702.82 1707.610 -0.28% +20.42%

0

Budapest 78804.49 77690.26 +1.43% +30.00%

Warsaw 2265.14 2240.58 +1.10% -3.32%

Bucharest 15708.48 16060.28 -2.19% +2.19%

Spread Daily

vs Bund change

in

Czech spread

Republic

2-year 5-year 10-year Poland

2-year 5-year 10-year FORWARD

3x6 6x9 9x12 3M

interban

k

Czech Rep Hungary Poland Note: FRA are for ask prices

quotes

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