Home Markets CEE MARKETS-Crown steadies after CPI data bolsters case for more rate hikes

CEE MARKETS-Crown steadies after CPI data bolsters case for more rate hikes

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By Gergely Szakacs BUDAPEST, Sept 13 (Reuters) – The Czech crown held onto Friday’s gains in early Monday trade, underpinned by an increase in inflation to a 13-year-high, which some economists say could bolster the case for more aggressive monetary tightening. The crown and the Hungarian forint have outperformed central European peers with gains of some 3.5% versus the euro this year as central banks in Prague and Budapest launched a cycle of rate hikes to rein in price growth. Czech inflation reached 4.1% year-on-year in August, overshooting the central bank’s 1 percentage point tolerance band around its 2% target by a wide margin, data showed on Friday. The Czech central bank has lifted its key two-week repo rate to 0.75% in two standard 25-basis-point steps since June to fight inflation. “We have recently revised our rate forecast and now expect a rate hike of 25 basis points at each of the remaining three meetings this year,” economists at…

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