* Forint dips as worries grow over Hungary-IMF deal
* Market watching for any Romanian moves to raise funds
* Serbia's dinar hits new low, cbank sells euros-traders
(Adds Serbian dinar, fixed income, quote)
By Marius Zaharia
BUCHAREST, July 16 (Reuters) - The forint underperformed its
central European peers on Friday as worries over Hungary's IMF
deal increased, while investors were eyeing potential new moves
by Romania to raise funds.
International lenders, which are in Budapest for a review of
Hungary's $25 billion loan programme, disagree with the
government on issues including a bank tax and next year's budget
deficit, according to a report. []
A business website also reported earlier this week that the
International Monetary Fund and the European Union asked
Budapest for a clear commitment to bring its budget deficit
below 3 percent of GDP next year. []
At 0934 GMT, the forint <EURHUF=> was down 0.64 percent on
the day. The Romanian leu <EURRON=> and the Czech crown were
little changed, while the Polish zloty <EURPLN=> was down 0.46
percent, tracking the forint and hit by lower risk appetite
globally.
"There are growing concerns about the ongoing IMF review and
negotiations for the 2011 budget," BNP Paribas said in a note,
commenting on Hungary.
"We expect the IMF/EC to find an agreement committing
fiscal authorities to achieve ... at least a stable deficit ...
which would already be an important sign of policy continuity
and which we believe would lead euro/forint lower."
Regional stock markets edged down, while bonds were little
changed in thin trade.
In the wider region, Serbia's dinar fell to a new all-time
low at 105.2 per euro on Friday, prompting the central bank to
sell euros to support it. []
ROMANIA'S FINANCES
Dealers were also eyeing potential new forays into the money
market by the Romanian finance ministry after it failed to sell
the planned amount at a debt auction on Thursday at its
self-imposed cut-off yield of 7 percent. []
To compensate for failed tenders, the ministry tapped the
money market earlier this week and borrowed 1.1 billion lei in
two-week deposits, which analysts said might hurt the leu.
"It is possible to see that again, but they (the ministry)
might also look for bilateral deals with some banks," a dealer
in Bucharest said.
Such moves, if overused, would increase worries over
Romania's ability to finance its vast budget deficit and put
even more pressure on longer-term yields and on the leu,
analysts said.
In Hungary, first-half budget deficit data came above the
full-year target, but analysts said the new government's fiscal
measures would probably help Hungary attain its end-2010 goal
despite the first-half overshoot. []
Data also showed Hungary's gross average wages <HUWAGE=ECI>
fell by 0.9 percent in annual terms in May after a 1.1 percent
rise in April, but analysts said that was unlikely to influence
the central bank. []
Hungary's central bank is expected to keep its key base rate
on hold at 5.25 percent again on Monday, according to a Reuters
poll. []
Investors were also eyeing Poland's June wages and
employment data due at 1200 GMT.
"The recovery in the Polish economy continues and the output
gap has more or less been closed - therefore the outlook for
Polish labour continues to improve," Danske Bank said in a note.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.427 25.407 -0.08% +3.5%
Polish zloty <EURPLN=> 4.093 4.074 -0.46% +0.27%
Hungarian forint <EURHUF=> 281.1 279.3 -0.64% -3.82%
Croatian kuna <EURHRK=> 7.222 7.215 -0.1% +1.21%
Romanian leu <EURRON=> 4.26 4.261 +0.02% -0.53%
Serbian dinar <EURRSD=> 104.54 104.44 -0.1% -8.28%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -1 basis points to 105bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +125bps over bmk*
10-yr T-bond CZ9YT=RR +3 basis points to +137bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +396bps over bmk*
5-yr T-bond PL5YT=RR -2 basis points to +375bps over bmk*
10-yr T-bond PL10YT=RR -3 basis points to +316bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1234 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 Ruth Pitchford and Susan Fenton)
