CEE MARKETS 3-Political deal aids Czech crown, region up

                                
 * FX, stocks rise on risk appetite
                                
 * IMF talk on euroisation in CEE helps FX
                                
 * Czech leaders seal new govt deal
                                
 * Poland plans to continue changing EU funds on market
                                
 
  (Adds Polish interview, Serb cbank, updates prices)
                                
 By Jason Hovet
                                
 PRAGUE, April 6 (Reuters) - The Czech crown gained on Monday
after a late weekend deal to put a new government in place,
while rising risk appetite lifted emerging Europe's currencies,
sending Hungary's forint to a two-month high.
 Dealers said a news report that an International Monetary
Fund document recommended struggling EU members in the region
should switch to the euro -- even without full euro zone
membership -- added to overall better sentiment. [ID:nL5363985]
                                
 Czech political leaders agreed on Sunday to form an interim
cabinet led by statistical office chief Jan Fischer to replace
outgoing Prime Minister Mirek Topolanek's cabinet and run the
country until an early election in the autumn. [ID:nL5286693]
                                
 In Hungary, after Prime Minister Ferenc Gyurscany pledged to
step aside last month, Gordon Bajnai cleared two important
hurdles on Sunday to becoming the next leader. [ID:nL5242336]
                                
 Central European stocks gained 1-2 percent, helped by a rise
in appetite for risk that also benefitted global equities as
hopes rose the world's economy was near a turning point.
                                
 The crown <EURCZK=>, the only central European currency to
gain versus the euro this year, rose 0.6 percent over Friday's
domestic close to 26.484 by 1100 GMT, near a three-week high.
                                
 Hungary's forint <EURHUF=> rose 1.1 percent to 293.4 per
euro and the Polish zloty <EURPLN=> jumped 1.4 percent to 4.425.
                                
 "We are still gaining support from the overall risk rally
and a positive tone in the region," Komercni Banka dealer
Miroslav Tutter said.
                                
 
                                
 EUROISATION
                                
 The IMF paper said euroisation offered the largest benefits
in resolving foreign currency debt overhang, along with removing
uncertainty and boosting confidence.
                                
 Analysts said the paper, cited in the Financial Times, was
probably internal debate and not an official position.
                                
 They also said the recommendation may have been overtaken by
the G20's move last week to bolster IMF funds to quash any
concerns over emerging market economies' access to funding.
                                
 The region's currencies have dropped sharply since hitting
summer highs as worries over growth, financing and banks in
emerging Europe mount, with the zloty losing a quarter of its
value against the euro zone's currency since September. 
                                
 But the Polish currency has gained 8 percent since
mid-February, when the government said it would start changing
European Union funds on the currency market. 
                                
 Deputy Finance Minister Dominik Radziwill said on Monday
Poland will continue exchanging EU funds. [ID:nL6395295]
                                
 On Monday, the Romanian leu <EURRON=> added 0.3 percent and
has gained 3.5 percent since the country secured a 20 billion
euro IMF-led aid package last month. Romania's central bank
chief said over the weekend the firming leu was reassuring but
the bank still reserved the right to intervene. [ID:nL4590379]
                                
 In Serbia, the central bank surprised with a 150 basis point
interest rate cut to 15 percent. The dinar <EURRSD=> gained 1
percent to bid at 92.84 per euro. [ID:nL6557032]
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   26.484   26.63   +0.55%    +1.02%
Polish zloty     <EURPLN=>    4.425    4.486  +1.38%    -7.01%
Hungarian forint <EURHUF=>  293.42   296.7    +1.12%   -10.18%
Croatian kuna    <EURHRK=>    7.43     7.421  -0.12%    -0.87%
Romanian leu     <EURRON=>    4.152    4.165  +0.31%    -3.31%
Serbian dinar    <EURRSD=>   92.841   93.829  +1.06%    -3.62%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -7 basis points to  176bps over bmk*
4-yr T-bond   CZ4YT=RR    -2 basis points to  +230bps over bmk*
8-yr T-bond   CZ8YT=RR    -3 basis points to  +302bps over bmk*

Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -14 basis points to  +955bps over bmk*
5-yr T-bond   HU5YT=RR    -11 basis points to  +908bps over bmk*
10-yr T-bond   HU10YT=RR  -13 basis points to  +774bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1307 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Patrick Graham/Victoria Main)