* CEE FX give back overnight gains from weak dollar
* IMF says emerging mkts to face capital acct pressures
* Poland in talks with IMF about contribution to fund
* Hungary, Czech cbanks expected to hold rates next week
(Adds IMF comments, details)
By Jason Hovet and Marton Dunai
BUDAPEST, March 19 (Reuters) - Eastern European currencies
gave back overnight gains on Thursday afternoon when some major
stop loss positions were triggered in London.
Regional currencies might also have suffered after the IMF
published a statement saying emerging economies are likely to
face prolonged capital account pressures, and their growth this
year would slow to between 1.5 and 2.5 percent. []
The Polish zloty <EURPLN=>, which had gained 1 percent on
the euro thanks to the dollar's weakening, swung to a slide,
trading at 4.615 per euro at 1615 GMT.
Hungary's forint <EURHUF=> also slid to negative territory
at 303.03 per euro, shedding only 0.36 percent on the day.
The Czech crown <EURCZK=> held to tighter ranges after an
overnight jump due to the dollar, adding 0.7 percent at 26.848.
Dealers said the market would likely remain choppy and
illiquid in coming days as investors sort out a clear direction.
Late in the day, Polish Prime Minister Doland Tusk told a
news conference in Brussels that Poland was in talks with the
IMF about "opening credit lines." [] His Finance
Minister, Jacek Rostowski later clarified that Poland wanted to
talk about the European Union lending up to $100 billion to the
IMF, not Poland borrowing from it. []
SHAKY POLITICS
Markets have kept a cautious eye on the shaky government
coalition in Prague in the run-up to a no-confidence vote due
next week. []
Hungary's ruling Socialists are also set to choose new
leaders over the weekend, and Prime Minister Ferenc Gyurcsany
may see his position weakened. []
The Czech and Hungarian central banks are both expected to
hold rates at monetary policy council meetings next week,
Reuters polls showed on Thursday. [] []
In Hungary, the median forecast in the poll sees the economy
shrinking by 4.5 percent this year.
In Romania, the leu <EURRON=> was stable against the euro,
and has traded within tight ranges around 4.29 for weeks as
markets await the outcome of Bucharest's negotiations with the
International Monetary Fund for an aid package.
The leu has shown little reaction to the prospects of
Romania getting financial aid though many economists say such a
package would be a positive sign for the overstretched economy.
GOVERNMENT DEBT MIXED
Central European currencies have dropped by up to 25 percent
since touching record highs last summer as the region's
export-reliant economies get dragged lower in the global
slowdown, and worries over external financing mount.
A recent rally in currencies, with 3-4 percent gains in the
past two weeks, has helped breathe some life back into bond
markets, with Hungarian yields especially ticking down.
But dealers said a turnaround was still not completely in
motion, and investors did not believe the government's plans to
stick to a 3 percent budget gap were viable.
A Hungarian Finance Ministry official in Budapest told a
news conference that the first-quarter deficit would likely
reach 80 percent of the year-end goal, but there was no need to
revise the main assumptions in the budget. []
Czech bond yields were up slightly.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.848 27.042 +0.72% -0.35%
Polish zloty <EURPLN=> 4.615 4.575 -0.87% -10.83%
Hungarian forint <EURHUF=> 303.03 301.93 -0.36% -13.03%
Croatian kuna <EURHRK=> 7.441 7.445 +0.05% -1.02%
Romanian leu <EURRON=> 4.294 4.294 0% -6.51%
Serbian dinar <EURRSD=> 94.398 94.298 -0.11% -5.21%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +4 basis points to +214bps over bmk*
4-yr T-bond CZ4YT=RR +1 basis points to +250bps over bmk*
8-yr T-bond CZ8YT=RR -34 basis points to +299bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -25 basis points to +1055bps over bmk*
5-yr T-bond HU5YT=RR -61 basis points to +1022bps over bmk*
10-yr T-bond HU10YT=RR -49 basis points to +892bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1816 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 Jason Hovet and
Marton Dunai; Editing by Ruth Pitchford/Victoria Main)
