* Irish debt worries keep downward pressure on region
* Volumes thin ahead of euro zone finmin meeting
By Marius Zaharia
BUCHAREST, Nov 16 (Reuters) - Emerging European currencies
inched lower in thin volumes on Tuesday, with investors
sensitive to any sign that debt-ridden Ireland is ready to bow
to pressure and seek a bailout.
Dealers said any sign of moves toward an Irish bailout from
a meeting of euro zone finance ministers in Brussels could be
positive in the short-term, before focus turns to other indebted
states.
Central European assets tend to suffer when worries about
the currency bloc's debt crisis rise and investors take risk off
the table. But the fall in the credibility of some of the euro
zone's smaller borrowers makes some of the less indebted
economies further east look like better bets.
Most at risk from a rise in risk aversion are Hungary, whose
2011 budget is based on special corporate taxes which may in
turn delay economic recovery and Romania, whose financing
ability depends largely on aid flows from the International
Monetary Fund and other lenders.
Despite better fundamentals, Polish markets, the most liquid
in the region, are also very sensitive to shifts in global risk
appetite.
"The market sentiment is not positive due to Ireland ... but
turnover is terribly low," one Budapest-based dealer said.
At 0833 GMT, the Czech crown <EURCZK=> was 0.2 percent
weaker, the Polish zloty <EURPLN=> and the Hungarian forint
<EURHUF=> were down 0.1 percent, while Romania's leu <EURRON=>
was flat.
"An Irish bailout should be positive (for the region), but
there's talk about Portugal having (debt) problems as well,"
another dealer in Bucharest said.
In Poland, below-forecast October inflation data on Monday
cooled expectations for a rate hike next week. However, two
central bankers who have rejected rate increases in August have
since said a rise should be considered. []
Governor Marek Belka said the country's improving growth
outlook could warrant some monetary tightening, but further
zloty appreciation would curb the scope for it. []
"The tug-of-war within the MPC (Monetary Policy Council) is
likely to continue this week further fuelling uncertainty
regarding a rate rise next week," Commerzbank said in a note.
"The zloty's upward potential therefore remains limited
short term.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.605 24.557 -0.2% +6.96%
Polish zloty <EURPLN=> 3.927 3.925 -0.05% +4.51%
Hungarian forint <EURHUF=> 276.58 276.4 -0.07% -2.25%
Croatian kuna <EURHRK=> 7.393 7.395 +0.03% -1.13%
Romanian leu <EURRON=> 4.292 4.292 0% -1.27%
Serbian dinar <EURRSD=> 106.64 106.69 +0.05% -10.09%
All data taken from Reuters at 0933 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Marius Zaharia;
Editing by Patrick Graham)
