* Forint lags region; Hungary cuts rates as expected
* Greek woes still weigh on the region
* Romania debt tender well-bid, yield falls
(Recasts with Hungary cbank move)
By Dagmara Leszkowicz and Marius Zaharia
WARSAW/BUCHAREST, Jan 25 (Reuters) - The Hungarian forint
edged down as the central bank chopped 25 basis points off its
main rate on Monday, while other central European currencies
firmed, buoyed by a successful Greek bond tender.
Hungary cut its key base rate to 6 percent, in line with
expectations, and some analysts said there was room for further
rate cuts this year as data such as Monday's weak November
retail sales signal the economy remains in a poor state.
"If global financial conditions do not worsen the NBH
(central bank) can continue reducing the base rate to 5.5
percent by Q2 2010," said Gergely Suppan of Takarekbank.
"However, it is expected that parliamentary elections in
April will force the NBH to take a pause."
After the decision, central bank governor Andras Simor said
further rate cuts were possible if market conditions allow, but
added that risk assessment has not improved since December
[].
At 1453 GMT, the forint <EURHUF=> was a touch weaker from
the previous close, trading at 271.2 per euro. The unit was
little changed from levels before the rate decision.
Elsewhere, the Romanian leu <EURRON=> rose 0.8 percent, the
Polish zloty <EURPLN=> firmed 0.4 percent and the Czech crown
<EURCZK=> gained 0.3 percent.
Romanian markets were also buoyed by a successful T-bills
tender, where the government sold the planned amount at a
significantly lower yield []. Secondary debt
markets in the region were quiet.
After a strong start this year, currencies pulled back last
week due to lingering concerns over Greece's fiscal woes and due
to uncertainty related to U.S. President Barack Obama's bank
proposals.
However, strong demand seen at the first Greek bonds issue
of the year [], swayed investors to resume buying
regional assets.
TENSION STILL THERE
Greece's debt problems have stretched investors' nerves this
year, as some Greek banks have exposure in the region and due to
concerns that trouble at the euro zone's periphery will offer a
negative example and complicate central Europe's bid to adopt
the single currency.
The Czech Finance Minister Eduard Janota said the government
would make recommendations that would allow the country to adopt
the euro in 2016 or 2017 [].
"CEE-3 (Poland, Czech Republic and Hungary) is under
pressure due to global risk aversion and the tension in Greece.
We expect this squeeze to continue and believe these could be
good entry levels going forward," analysts at SEB said.
Investors are keeping an eye on Poland's privatisation
process, key to keep its public debt levels below constitutional
ceilings. A breach of those levels would force the government to
tighten fiscal policy sharply, which will hurt growth.
On Monday, it said it may decide not to sell stakes in three
chemical makers [] and also said it was open to
sell its entire stake in the country's No. 2 refiner Lotos
<LTOS.WA> [].
The country also plans to launch a roadshow ahead of the
sale of up to 16 percent of energy distributor Enea <ENAE.WA>.
The sale of the stake worth some $500 million is planned for
February [].
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.994 26.077 +0.32% +1.25%
Polish zloty <EURPLN=> 4.066 4.083 +0.42% +0.93%
Hungarian forint <EURHUF=> 271.2 270.99 -0.08% -0.31%
Croatian kuna <EURHRK=> 7.291 7.295 +0.05% +0.25%
Romanian leu <EURRON=> 4.114 4.148 +0.83% +3%
Serbian dinar <EURRSD=> 97.5 97.36 -0.14% -1.66%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +7 basis points to 99bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +141bps over bmk*
10-yr T-bond CZ10YT=RR +1 basis points to +131bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -5 basis points to +384bps over bmk*
5-yr T-bond PL5YT=RR -5 basis points to +327bps over bmk*
10-yr T-bond PL10YT=RR -4 basis points to +287bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -2 basis points to +541bps over bmk*
5-yr T-bond HU5YT=RR -3 basis points to +503bps over bmk*
10-yr T-bond HU10YT=RR -4 basis points to +451bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1653 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz
and Marius Zaharia; Editing by ...)
