* Zloty extends gains from IMF bounce, outperforms
* IMF credit line should stabilise zloty, officials say
* Debt auctions awaited
(Adds fixed income, detail)
By Dagmara Leszkowicz
WARSAW, April 15 (Reuters) - The Polish zloty edged higher
on Wednesday, extending sharp gains from the previous session
after the government moved to secure a flexible credit line from
the International Monetary Fund (IMF).
The zloty <EURPLN=> rose 0.5 percent to 4.23 to the euro,
adding to more than 2 percent gains on Tuesday and outperforming
emerging European peers.
In Hungary, the forint <EURHUF=> trimmed gains, and fell 0.3
percent to 288.8 per euro. On Tuesday, lawmakers endorsed new
Prime Minister Gordon Bajnai to lead the struggling the country
out of recession, giving a lift to the currency. []
The Czech crown <EURCZK=>, the best performer in the region
this year, dropped 0.9 percent from Tuesday's close to bid at
26.72 per euro, hit still by poor data showings this week.
Romania's leu <EURRON=> fell 0.4 percent to 4.17 by 0808 GMT.
Poland is set to tap the IMF flexible credit line for $20.5
billion, following Mexico in a programme to help fundamentally
stronger countries out of the financial crisis. []
"This is a very good information for foreign investors as
the main concern -- problem with the country's financing --
practically disappears," said one Warsaw-based dealer."
Deputy Finance Minister Ludwik Kotecki said the country
likely won't use the credit line, but said access to the line
bodes well for the currency. []
The zloty has strengthened around 15 percent since
mid-February, when it neared all-time lows. Poland's Finance
Minister Jacek Rostowski said volatility in the zloty was likely
to decrease thanks to support from the IMF. []
Zloty volatility has been one of the biggest obstacles to
the country joining the pre-euro rate exchange ERM-2 mechanism
by June, a necessary step to enter the euro zone.
DEBT AUCTIONS COMING
A global equity rebound as well as G20 pledges for more
resources for emerging markets earlier this month has lifted
sentiment for riskier assets in recent weeks, but analysts and
strategists remained cautious on a full recovery.
Poland has fared better than peers in the global downturn,
and is expected to eke out 0.8 percent growth this year.
Analysts and officials predict the Czech economy to shrink by up
to 2 percent, while some analysts see Hungary's economy
shrinking by as much as 6 percent.
Polish bonds strengthened on Wednesday, tracking the
currency and some dealers said even the possibility of an end to
the central bank's easing cycle -- which has brought interest
rates to a historic low -- should not pose a threat.
"So far sentiment is good and I think investors will buy
bonds more actively," said Olgierd Zieblinski, dealer at
Rabobank in Warsaw.
Investors are also awaiting a switch tender, due on
Wednesday, while Czech markets looked to an inaugural auction of
a new 3-year floating rate bond. []
Hungary repurchased government bonds worth 34 billion
forints ($154.5 million) at a weekly auction on Wednesday, down
from 70 billion last week, the State Debt Management Agency
(AKK) said on its <HUBUYBACK> page.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.729 26.488 -0.9% +0.09%
Polish zloty <EURPLN=> 4.225 4.248 +0.54% -2.6%
Hungarian forint <EURHUF=> 288.79 288.07 -0.25% -8.74%
Croatian kuna <EURHRK=> 7.375 7.372 -0.04% -0.14%
Romanian leu <EURRON=> 4.169 4.153 -0.38% -3.71%
Serbian dinar <EURRSD=> 93.667 94.00 +0.36% -4.47%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +37 basis points to 221bps over bmk*
4-yr T-bond CZ4YT=RR -2 basis points to +232bps over bmk*
8-yr T-bond CZ8YT=RR -10 basis points to +293bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +406bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +350bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +297bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -24 basis points to +924bps over bmk*
5-yr T-bond HU5YT=RR -57 basis points to +869bps over bmk*
10-yr T-bond HU10YT=RR -47 basis points to +747bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1008 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 []
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 [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz;
editing by Stephen Nisbet)
