(Adds fresh prices, comments throughout.)
BUDAPEST, Nov 17 (Reuters) - Central European currencies
eased on Monday after the weekend's G20 summit failed to soothe
fears of world recession, stock markets fell and the U.S. dollar
firmed against the euro.
While losses for most currencies in the region's emerging
markets were relatively moderate, Serbia's dinar <EURRSD=> lost
about two percent and was bid at 86.031 against the euro at 0839
GMT.
The dinar, which has shed some nine percent this year
despite repeated interventions by the central bank, weakened
further despite news on Friday that the International Monetary
Fund (IMF) had extended a $516 million lifeline to Serbia.
The G20 meeting of leaders of major industrialised countries
did not decide on fresh money for the IMF, though IMF Managing
Director Dominique Strauss-Kahn said the leaders understood more
sacrifices may be needed to help states worst hit by the
financial crisis.
The dinar was pushed lower mainly by domestic orders. "The
market is unimpressed by the (size of the) IMF deal," one
Belgrade-based dealer said.
Ukraine and Hungary secured IMF help last month to ease
investor concerns over foreign currency exposure.
After firming late last week, currencies in the region eased
when the G20 failed to impress markets.
"Such meetings can help only if there are concrete decisions
and that has not happened now," one Budapest-based government
bond trader said.
The forint <EURHUF=> shed 0.22 percent to 267.74 against the
euro, Poland's zloty<EURPN=> weakened by 1.08 percent to 3.734,
while Romania's leu<EURRON=> eased 0.97 percent to 3.754 per
euro.
Equities also fell in the region. The Polish bourse's
WIG<> share index shed 1.44 percent by 1039 and stood at
389.11 points and Budapest's BUX<> fell 1.43 percent to
11,697 points, giving up early gains.
"After the dollar strengthening (against the euro since
Friday) it is difficult to expect gains on the Polish currency,
so we expect the zloty is likely to move in a range of 3.70-3.80
today," analysts at BPH bank in Warsaw wrote in a morning note.
Hungarian dealers said the forint's retreat after Friday's
firming was not a surprise and market volatility remained
relatively moderate.
"I would expect the forint to stay between 265 and 270, no
clear direction is seen, perhaps it can firm," one dealer in
Budapest said.
Elsewhere, Croatia's kuna eased 0.2 percent to trade at
7.129 to the euro.
"The system liquidity is tightened, and we see the kuna
trading at between 7.10 and 7.16 to the euro this week, amid a
solid offer of euros and banks' strong demand for the local
currency for mandatory reserves maintenance," Hypo
Alpe-Adria-Bank said in its daily notice.
"In such a situation, we also see the benchmark overnight
lending rate around the current high levels (at between 15 and
20 percent) this week."
Polish and Hungarian government bonds moved sideways and in
Hungary market liquidity remained very tight.
"The (Polish) market awaits the Monetary Policy Council
meeting due late November and if the MPC decides to cut rates
unexpectedly it might animate the market," said Maciej Slomka,
chief dealer at Pekao bank in Warsaw.
Czech domestic markets were closed due to a public holiday.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 25.28 25.162 -0.47% +4.59%
Polish zloty <EURPLN=> 3.734 3.694 -1.08% -3.71%
Hungarian forint <EURHUF=> 267.74 267.16 -0.22% -5.89%
Croatian kuna <EURHRK=> 7.129 7.115 -0.2% +2.7%
Romanian leu <EURRON=> 3.754 3.718 -0.97% -4.85%
Serbian dinar <EURRSD=> 86.031 84.277 -2.08% -9.23%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +14 basis points to 157bps over bmk*
5-yr T-bond CZ5YT=RR -5 basis points to +138bps over bmk*
10-yr T-bond CZ9YT=RR -5 basis points to +82bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -1 basis points to +418bps over bmk*
5-yr T-bond PL5YT=RR -17 basis points to +345bps over bmk*
10-yr T-bond PL10YT=RR -13 basis points to +269bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -48 basis points to +1020bps over bmk*
5-yr T-bond HU5YT=RR -58 basis points to +966bps over bmk*
10-yr T-bond HU10YT=RR +3 basis points to +576bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1016 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
(Reporting by Reuters bureaus, writing by Sandor Peto;
Editing by Ruth Pitchford)
