CEE MARKETS 4-FX weak, off lows as c.banks bring deep cuts

                                
   (Updates throughout with Czech, BOE rate changes)
                                
 By Dagmara Leszkowicz and Jason Hovet
                                
 WARSAW/PRAGUE, Nov 6 (Reuters) - The Czech crown slid almost
1 percent after the country's central bank cut rates by its
biggest amount in six years, bringing the Polish zloty with it
before recouping some losses as major European central banks
made their own deep cuts.
                                
 At 1218 GMT, the Czech crown <EURCZK=> was off 1.2 percent
from Wednesday's levels at 24.71, but just a touch below the
levels seen before the Czech central bank slashed rates by 75
basis points to 2.75 percent, the lowest in the European Union.
                                
 The European Central Bank cut its main lending rate by 50
basis points on Thursday, as expected, although some interest
rate traders thought a 75 basis point cut might have been in
store.
                                
 Interbank lending rates dropped more than 100 basis points,
while yields fell in the thin bond market.
                                
 Other currencies tracked the crown's move, with Poland's
zloty <EURPLN=> down 1.3 percent on the day at 3.56. Romania's
leu <EURRON=> down 0.6 percent on the day at 3.7, while
Hungary's forint <EURHUF=> shed 1.6 percent to 260.65 per euro.
                                
 The central bank in the Czech Republic, which the EU has
said should weather the financial crisis well, was expected to
cut rates by a quarter percentage point.
                                
 "It's a bold move, but ultimately not bad in the current
environment where they are worried about growth," a London
currency dealer said. "The market wasn't expecting this... but
is drifting back lower (stronger) now.
                                
 Currencies reversed course shortly from the Czech move after
the Bank of England cut by borrowing costs by a hefty 150 basis
points.
                                
 Serbia's dinar, the region's biggest loser in the last
month, also fell, underlining concerns that tightening credit
markets and a sharp slowdown in growth will eventually send more
in the region to the IMF for aid.
                                
 Serbia's dinar <EURRSD> fell 1 percent to 86.487 per euro,
as banks remained reluctant to sell euros due to a lack of
external credit inflows.
                                
 "Liquidity is thin and spreads are widening making the dinar
declines even more drastic," one treasury analyst said.
                                
 Worries over Serbia's external financing have hit the
currency, which has shed 12.5 percent since Oct. 1, and the
country's government said earlier in the week it was in talks
for a stand-by deal with the International Monetary Fund
[ID:nL5634359].
                                
 Serbia's talks with the IMF followed a $25 billion IMF/EU
aid package for Hungary at the end of last month, which helped
calm investor nerves in the region and stabilised the forint.
                                
 Hungary's central bank and government said on Thursday it
would provide 600 billion forints ($2.95 billion) in funding to
the country's banks as part of the package [ID:nBSB001677].
                                
 
                                
 GROWTH OUTLOOK WORSENS
                                
 Global stocks continued to slide as the focus turned to
bleak economic outlooks after a rally leading up to the U.S.
election. Central European bourses fell on Thursday, with
Hungary's BUX <.BUX> down 6 and others more than 2 percent.
                                
 Earlier on, Thursday Austria's Raiffeisen International
<RIBH.VI>, emerging Europe's second-biggest bank, cut its 2008
net profit forecast and put mid-term goals under review as weak
economic development will likely hit growth [ID:nL5485377]. 
                                
 Central Europe's economies have started to feel the strain
of lower demand from their main trader partner, the euro zone.
Hungary's industrial output fell in September on lower exports,
data showed Thursday [ID:nL680750], which followed a
narrower-than-expected Czech trade surplus on Wednesday.
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2008 
Czech crown      <EURCZK=>   24.708   24.404  -1.25%   +6.75%
Polish zloty     <EURPLN=>    3.560    3.514  -1.31%   +1.12%
Hungarian forint <EURHUF=>  260.650  257.450  -1.24%   -3.08%
Croatian kuna    <EURHRK=>    7.143    7.136  -0.1%    +2.5%
Romanian leu     <EURRON=>    3.704    3.683  -0.57%   -3.46%
Serbian dinar    <EURRSD=>   86.487   85.627  -1%      -9.81%
All data taken from Reuters at 1318 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
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 (Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz/Jason Hovet, Editing by Andy Bruce)