CEE MARKETS 3-Zloty at 14-month high,leu hit by cbank comment

                                
 * Zloty around 14-month highs, cbank's hawkish comments helps
                                
 * Romania central bank head concerned about stronger leu
                                
 
                                
 By Sam Cage and Dagmara Leszkowicz
                                
 BUCHAREST/WARSAW, March 4 (Reuters) - Polish and Romania's
policymakers moved their currencies in opposite directions on
Thursday, when the zloty strengthened on hawkish comments and
the leu was hurt by a central banker's concerns over its rise.
                                
 The Polish zloty <EURPLN=> hovered near 14-month highs after
the central bank's governor said on Wednesday the 10-strong
Monetary Policy Council (MPC) should consider tightening rates. 
                                
 His comments has been echoed by a newly appointed ratesetter
Elzbieta Zielinska-Glebocka, who said the central bank should
refrain from changing its policy bias for a month or two and two
small rate hikes were probable in the second half.
[ID:nWSF008782]
                                
 "The rally on the zloty is incredible," said Ulrich
Leuchtmann, analyst at Commerzbank.
                                
 "There are lots of speculating market players who bet on the
zloty but also more hawkish than previously expected comments of
the MPC are supportive for the unit."
                                
 Analysts expect Poland's key rate to be increased to 4
percent from a current all-time low of 3.5 percent by year end.
                                
 By contrast, the leu <EURRON=> came under pressure on
Thursday after Romania's central bank governor said he was
concerned it could rise too far as the country struggles to
recover from recession. [ID:nBUC003643]
                                
 "The news is not good for the leu, but many in the market
already had the feeling the central bank doesn't like the pace
of its trend," one Bucharest based dealer said.
                                
 By 1520 GMT the zloty was 0.3 percent stronger against the
euro, while the leu was a touch down to the common currency.
                                
 Other units were also weaker, with Hungary's forint and the
Czech crown <EURCZK=> both 0.2 percent down to the euro.
                                
 Romania's paper yields fell after the central bank sold a
lower-than-planned 396 million lei in five-year bonds. The issue
was oversubscribed with bids totalling 2.1 billion lei.
[ID:nLDE6231NQ]
                                
 Polish bonds were stronger, but dealers said it was because
of the stronger zloty. They also said hawkish comments of the
MPC members could finally push bond prices lower.
                                
 In Hungary, papers held onto recent levels in thin trade.
Dealers said the situation should continue until March 11 when
February inflation data is due.
                                
 Regional currencies have enjoyed a strong run in the last
few weeks and have been further helped by a new Greek austerity
plan, which has supported investors' risk appetite.
                                
 The zloty is the region's outperformer, rising almost 5.6
percent against the common currency since the start of the year.
At the same time the leu gained 3.6 percent, the crown 2.5
percent and the forint 1.4 percent.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>  25.786   25.733   -0.21%   +2.06%
Polish zloty     <EURPLN=>   3.891    3.902   +0.28%   +5.47%
Hungarian forint <EURHUF=> 266.3    265.88    -0.16%   +1.52%
Croatian kuna    <EURHRK=>   7.269    7.267   -0.03%   +0.55%
Romanian leu     <EURRON=>   4.088    4.086   -0.05%   +3.65%
Serbian dinar    <EURRSD=>  99.638   99.553   -0.09%   -3.77%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR    -20 basis points to  82bps over bmk*
7-yr T-bond   CZ7YT=RR   +5 basis points to  +122bps over bmk*
10-yr T-bond   CZ10YT=RR   +4 basis points to  +99bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    0 basis points to  +405bps over bmk*
5-yr T-bond   PL5YT=RR   +1 basis points to  +330bps over bmk*
10-yr T-bond PL10YT=RR   +2 basis points to  +286bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -2 basis points to  +538bps over bmk*
5-yr T-bond   HU5YT=RR   +1 basis points to  +479bps over bmk*
10-yr T-bond   HU10YT=RR +1 basis points to  +437bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1520 CET.
Currency percent change calculated from the daily domestic 
close at 1700 GMT.
                                
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 (Additional reporting by Reuters bureaus; Editing by Susan
Fenton, Ron Askew)