While the European Central Bank is still debating whether interest rates in the euro area could rise this year, central banks in the east of the EU are raising interest rates in rapid succession in view of high inflation rates.

Central bankers in Poland and Romania surprised the markets again this week.

But the first analysts are already asking whether the currency watchdogs are exaggerating the race to raise interest rates.

Andreas Mihm

Business correspondent for Austria, Central and Eastern Europe and Turkey based in Vienna.

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Poland's National Bank raised the key interest rate by 0.5 points to 2.75 percent on Tuesday.

The aim of this fifth increase within five months is to contain the inflation rate of 8.6 percent.

Warsaw's central bankers started raising interest rates in October, later than their colleagues in Prague and Budapest, who have been tightening the money supply since the summer.

While the size of the interest rate hike was expected, observers were surprised by the following explanations by Bank Governor Adam Glapiński.

Analysts heard a tone "decidedly more restrictive" than last, ING noted "a decisive change of course".

Most market participants are now expecting a plus of 0.5 points in March.

Austria's Erste Bank sees the key interest rate at 4.5 percent in the middle of the year.

He had already reached that level in the Czech Republic.

Romania and Poland are driving up interest rates

Not only the interest rate hike gave the zloty a strong boost, which only fell from its eight-month high of less than 4.50 zloty per euro on Friday after strong US inflation supported the dollar and put emerging market currencies under pressure.

Glapiński made it clear that he considered a key interest rate of 4 percent to be unproblematic for growth and that the central bank wanted to curb inflation by appreciating the currency.

He also announced that in future the central bank would no longer be able to add EU funds to its reserves and make them available to the government in zlotys, but that Brussels euros could be converted on the market – “which would inevitably lead to an appreciation of the zloty ' According to analysts at the financial group KBC.

Romania's central bank added one to Poland's surprises.

Also by 0.5 percent, but twice as much as expected on the markets, it drove its key interest rate to 2.5 percent.

Here, too, the background to the monetary policy acceleration are increased inflation expectations, which, according to forecasts from Bucharest, could soon reach double-digit values.

In the EU, such can currently only be found in the Baltic States.

In Hungary, the unexpectedly strong January inflation rate of 7.9 percent (after 7.4 percent in December) fueled expectations of further interest rate hikes on Friday.

The Budapest central bank recently raised the key rate by 0.5 points to 2.9 percent.

Ahead of the elections scheduled for early April, Hungary's Prime Minister Viktor Orbán is currently bringing a lot of money to the people.

After the increase in pensions, pensioners will receive an extra payment of one billion euros, and families with children will receive an income tax refund of 1.7 billion euros in February.

The Czech National Bank has turned the interest rate screw the most so far.

The rate is currently at a 20-year high of 4.5 percent – ​​further steps cannot be ruled out.

Some people get a bit dizzy: "Excessive interest rates?" asks Commerzbank analyst Tatha Ghose, referring to the Deputy Governor of the Prague National Bank, Tomáš Nidetzký, who spoke of exactly that and a rate cut next year.