(Adds Serbia c.bank, updates prices)
PRAGUE, Jan 29 (Reuters) - Poland's zloty weakened on
Thursday after 2008 growth data hinted at the extent of the
economic slowdown, while central Europe's currencies edged lower
as stocks fell.
Currencies have deepened their fall in January as economic
outlooks for the region darkened and central banks pushed ahead
with looser monetary policy, but have gained some traction in a
cautious upturn for global stocks and risk appetite this week.
The region's largest economy, Poland, grew 4.8 percent last
year, although it is slowing quickly in the global slump.
[]
"The data shows that the last three months of 2008 brought a
sharp slowdown, which supports the case for more interest rate
cuts," said Marta Petka-Zagajewska, economist at Raiffeisen
Bank.
The zloty <EURPLN=> was bid 0.3 percent down at 4.372 per
euro by 1041 GMT, and dealers said it has stuck to a tight range
since rebounding from a more than four-year low hit last week.
"The market gets heavy around the (weaker) level of the
range," said Jan Koprowski, dealer at BNP Paribas. "If stocks
continue their better performance it will support the zloty and
the region."
Central European stock exchanges traded around 1 percent
lower on Thursday after strong gains earlier in the week.
Data this month has pointed to a deeper than previously
thought slowdown for central Europe's export-reliant economies
as demand collapses in the struggling euro zone.
Poland cut interest rates more than expected to 4.25 percent
on Tuesday as it battles to stay out of recession.
Serbia's central bank held its key rate at 16.5 percent on
Thursday, and despite expectations, offered no liquidity boost
through amended reserve requirement rules. []
The dinar <EURRSD=> trimmed some gains after the decision,
but was still up 0.8 percent. On Wednesday, the central bank
intervened twice to prop up the currency after it hit an
all-time low. []
In Hungary, already set for a recession in 2009, the forint
<EURHUF=> was lower at 286.87 to the euro.
Hungary should reshuffle around 1 trillion forints' worth of
budget items by slashing personal income tax and employers'
social contributions to boost the economy, Prime Minister Ferenc
Gyurcsany said on Thursday. []
The Czech crown <EURCZK=> dipped 0.5 percent from
Wednesday's domestic close to 27.547 per euro, while the
Romanian leu <EURRON=> added 0.1 percent.
"Sentiment is fragile, and it is impossible to expect a
definitive turnaround to strengthening currencies," said Lubos
Mokras, analyst at Ceska Sporitelna bank.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.547 27.422 -0.45% -2.88%
Polish zloty <EURPLN=> 4.372 4.357 -0.34% -5.88%
Hungarian forint <EURHUF=> 286.87 285.84 -0.36% -8.13%
Croatian kuna <EURHRK=> 7.365 7.365 0% 0%
Romanian leu <EURRON=> 4.232 4.236 +0.09% -5.14%
Serbian dinar <EURRSD=> 94.129 94.838 +0.75% -4.94%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +15 basis points to 97bps over bmk*
4-yr T-bond CZ4YT=RR 0 basis points to +107bps over bmk*
8-yr T-bond CZ8YT=RR -5 basis points to +128bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1143 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 Patrick Graham and Andy Bruce)
