CEE MARKETS 2-FX mixed; Romanian leu extends rise, zloty off

                                
 * Romanian leu tad stronger, dealers suspect cbank help
                                
 * Zloty falls back to 1-week low, other FX steady
                                
 
  (Adds details, updates prices, bonds)
                                
 By Jason Hovet
                                
 PRAGUE, Sept 23 (Reuters) - Romania's leu rose on Wednesday,
extending gains since getting approval for its next IMF loan
tranche although some dealers speculated the central bank was
intervening as the unit outperformed regional peers.
                                
 The Polish zloty hit a one-week low, dented by expectations
of a big corporate dividend payout, while other currencies were
stuck in recent ranges as investors turn more cautious.
A summer rally for emerging assets has started petering out
as governments grapple with widening fiscal gaps and
unemployment creeps up despite signs central Europe is emerging
from the economic crisis.
                                
 But Romania's leu <EURRON=> edged up 0.3 percent to add to
gains since the International Monetary Fund approved late on
Monday Romania's next loan tranche. Some Bucharest dealers said
the central bank has been intervening on the market to counter
lower euro liquidity.
                                
 "The central bank is intervening indirectly, and the timing
of its interventions sends the signal that it will continue to
use IMF cash to defend the leu stability," a dealer said.
                                
 The central bank declined to comment.
                                
 In Poland, the zloty fell 0.4 percent to bid at 4.179 to the
euro by 0931 GMT, after trading as low as 4.186 earlier. The
unit had showed only a modest gain in the previous session even
as Warsaw's blue-chip index <.WIG20> jumped more than 4 percent.
                                
 The index rose 1 percent on Wednesday to lead peers higher.
                                
 The zloty did not react to rallying stocks or to dollar
weakening versus the euro, analysts at BRE bank said.
                                
 "Elements pressuring the unit are the possibility of
exchanging big flows on the market (for dividend payouts) and a
negative fiscal outlook of rating agencies," they added in a
note.
                                
 Shareholders of Poland's largest insurer PZU are set to vote
on a dividend payout on Friday, with markets worried the
expected 12 billion zloty figure will hit bond prices as the
company will be forced to sell treasuries to raise cash.
                                
 Poland sold all 2 billion zlotys of bonds due in 2022 on
offer at a Wednesday tender, boosting the long end of the bond
curve where yields dipped some 5 basis points lower.
[ID:nWAR010923]
                                
 
                                
 BUDGET TALKS
                                
 Polish Prime Minister Donald Tusk on Tuesday blamed
President Lech Kaczynski for an expected rise in the government
budget deficit next year, speaking a day after Fitch warned on
central Europe's rising debt. [ID:nWAR010917] [ID:nLM191923]
                                
 "The PM is blaming this on the fact that the president and
opposition parties block any government initiative to rein in
spending, while at the same time (he is) rejecting Fitch's
comments that the 55 percent/GDP debt mark may be surpassed next
year," Cheuvreux economist Simon Quijano-Evans said. 
                                
 "The latter point will only hurt sentiment in our view."
                                
 The Czech crown <EURCZK=> was a shade weaker at 25.122 to
the euro as political parties were set to meet interim Prime
Minister Jan Fischer over the 2010 budget draft ahead of
parliamentary debate on Thursday. [ID:nLL702737]
                                
 The economic crisis has crushed growth in central Europe
with only Poland avoiding recession due to a larger domestic
market. But analysts say more pain will be felt as unemployment
tops out in the coming quarters, denting consumer demand.
                                
 Polish retail sales rose less than expected in August, while
Hungary's July sales showed a sharp drop after a VAT tax rise
came into effect. [ID:nLM320603] [ID:nLN68264] The Hungarian
forint <EURHUF=> was steady at 271.1 to the euro. 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   25.122   25.12   -0.01%    +6.49%
Polish zloty     <EURPLN=>    4.179    4.162  -0.41%    -1.53%
Hungarian forint <EURHUF=>  271.08   271.11   +0.01%    -2.78%
Croatian kuna    <EURHRK=>    7.269    7.275  +0.08%    +1.32%
Romanian leu     <EURRON=>    4.227    4.241  +0.33%    -5.03%
Serbian dinar    <EURRSD=>   92.97    93.267  +0.32%    -3.75%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR    -5 basis points to  186bps over bmk*
7-yr T-bond   CZ7YT=RR   +14 basis points to  +184bps over bmk*
10-yr T-bond  CZ10YT=RR   -2 basis points to  +167bps over bmk*
All data taken from Reuters at 1132 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 Stephen Nisbet)