CEE MARKETS 2-Forint leads as FX hold steady, stocks down

                                
 * FX hold steady in ranges, markets quiet
                                
 * Romania tenders 364-day paper, yield may fall
                                
 * Limited impact from China rate rise
                                
 
  (Adds Polish c.bank vote, updates prices)
                                
 PRAGUE, Dec 27 (Reuters) - Eastern European currencies held
steady at the start of the final trading week of the year and
dealers said trading would likely stay muted as investors held
onto profits.
                                
 The zloty inched lower, mostly ignoring comments from Polish
Finance Minister Jacek Rostowski in a local newspaper interview
saying the country could join the euro zone's testing ground,
the ERM2 mechanism, in 2013. [ID:nLDE6BQ04A]
                                
 The currency has held on the strong side of the 4.00 per
euro level over the past two weeks. Two markets sources told
Reuters last week that Poland's state-owned BGK bank was buying
zlotys last week in exchange for euros.
                                
 Stock markets were lower, with Warsaw <.WIG20> and Budapest
<.BUX> inching down 0.2  percent, while Prague <.PX> lost half a
percent, mostly on  profit-taking after rising 3 percent in its
previous five sessions. There was limited impact from a Chinese
interest rate hike over the weekend -- the kind of move that
usually hits appetite for emerging market risk assets.
[ID:nTOE6BQ03A]
                                
 Stocks have rallied to the end of 2010 thanks to an
improving outlook in the global economy.
                                
 Poland's finance ministry is widely expected to try to keep
the zloty firm before a Dec. 31 fixing to avoid breaching debt
levels that, if exceeded, would trigger spending cuts. Almost a
quarter of Polish debt is in foreign currencies. [ID:nLDE6B91CT]
                                
 The zloty is up 1.3 percent this month, and analysts remain
bullish on the unit thanks to a better economic outlook than
peers and the likely start of monetary tightening early in 2011.
                                
 A news report on Monday said Poland's central bank head
Marek Belka backed the bank's October decision to raise the
required reserve rate for banks -- seen as a precursor to
tighter policy. [ID:nLDE6BQ09Y]
                                
 Dealers and analysts said sharp moves in low liquid markets
in central Europe this week were still a risk.
                                
 "There might be some coincidental changes without any
short-term trends," Bank BPH said.
                                
 "If we have no further interventions on the part of BGK, the
zloty will trade inside 3.95-3.98 versus the euro with limited
market activity (since the London market is closed)."
                                
 On Monday, the zloty <EURPLN=> dipped to 3.974 to the euro,
down 0.2 percent from Friday, when much of central Europe was on
a market holiday. Hungary's forint <EURHUF=> added 0.2 percent.
                                
 The Czech crown <EURCZK=> inched down to 25.315 per euro,
hitting a fresh five-month low. With Czech interest rates the
lowest in the region, the crown has given up nearly half of its
2010 gains since hitting a high in November.
                                
 The Romanian leu <EURRON=> was flat at 1039 GMT.
                                
    
                                
 ROMANIA TENDER
                                
 In Romania, markets were waiting for a tender of 364-day
treasury bills. Some traders expect a steepening of the curve,
with six-month and one-year maturities looking attractive, while
yields for longer-dated paper are expected to rise as Romania
tries to extend the duration of its debt.
                                
 "The average yield (at Monday's tender) may fall at 6.9
percent (from 7.0 percent at the last tender)," a trader said.
                                
 "I think next year they will have to pay higher yields to
get money from abroad dmue to high rollover needs and as locals
are already close to reaching their limits (of investing in
Romanian government debt)." 
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>   25.315   25.283  -0.13%    +3.96%
Polish zloty     <EURPLN=>    3.974    3.965  -0.23%    +3.27%
Hungarian forint <EURHUF=>  278.25   278.9    +0.23%    -2.84%
Croatian kuna    <EURHRK=>    7.384    7.385  +0.01%    -1.01%
Romanian leu     <EURRON=>    4.286    4.286   0%       -1.13%
Serbian dinar    <EURRSD=>  106.05   104.9    -1.08%    -9.59%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
7-yr T-bond   CZ7YT=RR    -11 basis points to  +72bps over bmk*
10-yr T-bond   CZ9YT=RR    -7 basis points to  +82bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1140 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news [EMRG]
Spot FX rates
Eastern Europe spot FX <EEFX=>    Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=>       Latin America spot FX <LATAMFX=>
Other news and reports  
World central bank news [CEN]  Economic Data Guide <ECONGUIDE> 
Official rates [GLOBAL/INT]  Emerging Diary [EMRG/DIARY] 
Top events [M/DIARY]  Diaries [DIARY] Diaries Index [IND/DIARY] 
 (Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Stephen Nisbet)