CEE MARKETS 1-Crown firms on cbank comments, other FX stable

                                
 * Czech crown firms after Tuma comments
                                
 * Fitch: EMEA downside risks should not be underestimated
                                
 
                                
 By Marius Zaharia
                                
 BUCHAREST, Jan 19 (Reuters) - The crown firmed early on
Tuesday helped by central bank comments that Czech interest
rates may be at the bottom, while other central European
currencies were stable.
                                
 Central bank Governor Zdenek Tuma said it may be possible
that interest rates were at their lowest at their current level
of 1 percent [ID:nPRG001528], on par with the euro zone after
seven cuts totalling 275 basis points over the last 17 months.
                                
 "The governor's comments helped a bit," said a trader in
Prague.
                                
 At 0828 GMT, the crown traded at 27.798 per euro, up 0.3
percent on the day. The Polish zloty was close to testing a key
psychological level of 4.0 per euro, before retreating to trade
flat on the day at 4.017.
                                
 The forint was down 0.2 percent and dealers expect it to
remain stuck in a 266-269 range until the next central bank
meeting next Monday. The bank slowed the pace of rate cuts to 25
basis points in December, bringing the key rate at 6.25 percent.
                                
 Romania's leu was also little changed after outperforming
its peers this year, mostly as markets priced in the
disbursements of next tranches from an IMF-led aid deal after
the approval of an austerity 2010 budget last week.
                                
 "The current firming of the leu against the euro has a
psychological component more than a change in economic
fundamentals," central bank's chief economist Valentin Lazea
told online news site www.hotnews.ro on Monday.
                                
 "The psychological component comprises a better sentiment
concerning the entire Central and Eastern European region as
well as ... stop losses that some commercial banks make at
certain levels of the exchange rate."
                                
 Regional markets have been buoyed so far this year by an
improved economic outlook and by a higher appetite for carry
trades, but worries remain over wide budget deficits or a
spillover from Greece, hurt by its fiscal problems.
                                
 Moreover, Fitch Ratings warned on Tuesday that downside
risks in EMEA markets should not be underestimated.
                                
 "While not Fitch's central case, a double-dip recession, or
even stagnation in emerging markets, could have a negative
impact on the ratings of emerging market corporate issuers," the
agency said in a statement.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>  25.798   25.867   +0.27%   +2.02%
Polish zloty     <EURPLN=>   4.017    4.016   -0.02%   +2.17%
Hungarian forint <EURHUF=> 267.7    267.17    -0.2%    +0.99%
Croatian kuna    <EURHRK=>   7.276    7.281   +0.07%   +0.46%
Romanian leu     <EURRON=>   4.107    4.103   -0.1%    +3.18%
Serbian dinar    <EURRSD=>  97.04    96.85    -0.2%    -1.2%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR    -9 basis points to  75bps over bmk*
7-yr T-bond   CZ7YT=RR    -11 basis points to  +114bps over bmk*
10-yr T-bond   CZ10YT=RR    0 basis points to  +117bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +1 basis points to  +386bps over bmk*
5-yr T-bond   PL5YT=RR   +1 basis points to  +328bps over bmk*
10-yr T-bond PL10YT=RR   +1 basis points to  +288bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +1 basis points to  +637bps over bmk*
5-yr T-bond   HU5YT=RR   +1 basis points to  +579bps over bmk*
10-yr T-bond   HU10YT=RR  0 basis points to  +501bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1028 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 bureaux, writing by Marius Zaharia
Editing by Andy Bruce)