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By Sandor Peto and Marius Zaharia
BUDAPEST/BUCHAREST, Nov 17 (Reuters) - The Romanian leu led
losses in central European currencies on Monday, as the
weekend's G20 summit made investors shy away from risk, while
the Hungarian forint showed resilience to an S&P downgrade.
Markets shuddered under the wave of news about declining
economies, with Japan the latest country to enter a recession.
European equity markets fell. In the region, the Polish
bourse's WIG20 <> share index had shed 2 percent at 1510
GMT, Budapest's BUX <> fell 0.2 percent and Bucharest's BET
<> was down 3.3 percent.
The G20 meeting of leaders of major industrialised countries
did not decide on any fresh money for the IMF, although the Fund
said it was likely to need an extra $100 billion in the next six
months to help countries which are in trouble.
(For details please double click on [])
The leaders agreed on steps to rescue the global economy
[], but generally left it to individual governments
to tailor their own response [].
The Romanian leu <EURRON=> was worst hit in the region,
falling 2.5 percent to 3.798 per euro.
"The G20 meeting didn't produce any fast solution to tackle
the crisis and the region is affected," said one dealer with a
foreign bank in Bucharest. "The leu is falling more because
commercial demand for euros from retailers adds up."
Ratings agency Standard & Poor's cut Hungary's ratings to
'BBB/A-3' from 'BBB+/A-2' with a negative outlook, due to its
dependence on external financing inflows in a deteriorating
global environment [].
The market impact was fairly neutral, as the downgrade
follows similar moves by Fitch and Moody's. The forint <EURHUF=>
traded 0.7 percent lower at 268.37 per euro.
"The forint is quite resilient. The region, and the
international market sentiment will determine its movements in
the rest of the week," said one Budapest-based dealer.
The Polish zloty <EURPLN=> lost 2 percent to 3.783 per euro,
while the Czech crown <EURCZK=> dropped 0.3 percent to 25.395 to
the euro.
Dealers saw more weakening potential in the zloty this week
in the wake of output data for October on Thursday which will
offer a clearer image on how the Polish economy weathers the
recession in the country's biggest trading partner, Germany.
Serbia's dinar <EURRSD=>, one of the most battered
currencies in the region, lost more than one percent on the day
as well and was bid at 86 against the euro.
The dinar, which has shed some nine percent this year
despite repeated interventions by the central bank, weakened
further as the market was unimpressed by news on Friday that the
IMF had extended a $516 million lifeline to Serbia.
Ukraine and Hungary secured IMF help last month to ease
investor concerns over foreign currency exposure.
Elsewhere, Croatia's kuna was down 0.2 percent at 7.127 to
the euro.
Polish and Hungarian government bonds moved sideways and in
Hungary market liquidity remained very tight.
Hungary's central bank bought 30 billion forints worth of
government bonds, as planned [], while Poland sold
706 million zlotys in 13-week and 1.2 billion zlotys in 52-week
treasury bills.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 25.395 25.325 -0.28% +4.16%
Polish zloty <EURPLN=> 3.783 3.707 -2.05% -5.07%
Hungarian forint <EURHUF=> 268.37 266.44 -0.72% -6.14%
Croatian kuna <EURHRK=> 7.127 7.115 -0.17% +2.72%
Romanian leu <EURRON=> 3.798 3.705 -2.51% -6.08%
Serbian dinar <EURRSD=> 86.001 85.007 -1.17% -9.19%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +19 basis points to 161bps over bmk*
5-yr T-bond CZ5YT=RR +1 basis points to +144bps over bmk*
10-yr T-bond CZ9YT=RR +5 basis points to +93bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +416bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +344bps over bmk*
10-yr T-bond PL10YT=RR 0 basis points to +271bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -9 basis points to +1049bps over bmk*
5-yr T-bond HU5YT=RR -21 basis points to +973bps over bmk*
10-yr T-bond HU10YT=RR -39 basis points to +564bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1729 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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emerging market news []
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Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
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events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, writing by Sandor Peto and
Marius Zaharia; Editing by Victoria Main)
