* Market holidays in Poland, Hungary
* Romania/IMF review awaited
* Hungary budget reaction mute
* Czech crown unmoved after PMI
PRAGUE, Nov 1 (Reuters) - Emerging European currencies edged
lower on Monday, with the leu stuck in recent ranges as markets
waited for the International Monetary Fund to comment on
Romania's slow progress in meeting aid conditions.
The Hungarian forint <EURHUF=> dipped 0.2 percent in holiday
trading following the release over the weekend of a 2011 budget
that aims to cut the deficit to below 3 percent of GDP but which
did little to reassure analysts of budget sustainability.
[]
The Czech crown <EURCZK=> was little moved, down 0.1 percent
on the day, after the Purchasing Managers' Index (PMI) dipped in
October from a three-month high, but held strong for a 12th
straight month. []
A rise in Asian shares following strong Chinese PMI
signalled better investor appetite for risk, but that failed to
translate into central Europe where trading was subdued by
market holidays in Hungary and Poland.
The IMF will present a review of its 20 billion euro bailout
deal for Romania at 0930 GMT.
Romania has failed to approve key pension reforms after
President Traian Basescu returned the bill to parliament, asking
for a different retirement age for women. Analysts expect the
Fund to overlook the issue as progress has been made elsewhere.
[]
One dealer said he expected the Fund to green-light its next
tranche, perhaps with some additional conditions, despite the
missed deadline on pension reform.
"They will give us what we need. When some of the peripheral
Europe problems get fixed, they'll close the cash pipe with no
remorse, but now is not the time," the dealer said.
"I expect a muted reaction either way, because most of
Europe is closed (for holidays)."
The leu <EURRON=> slipped less than 0.1 percent, while the
Polish zloty <EURPLN=> lost 0.2 percent.
BUDGET CONCERNS
Romania's efforts to draft a credible budget for 2011 was
probably the focus of talks with the IMF, analysts said.
The deal is crucial for maintaining Romania's credibility
among international investors and Bucharest is expected to seek
a fresh agreement once the existing one expires in March.
In Hungary, reaction was muted after the centre-right Fidesz
government submitted the 2011 budget to parliament on Saturday
with a deficit target of 2.9 percent of gross domestic product
-- the lowest since Hungary joined the European Union in 2004.
The plan uses new taxes on business sectors such as banking
and energy, while reducing the size of the government.
The government will not transfer taxpayers' payments into
private pension funds for the next 14 months, retaining 60
billion forints this year and 360 billion forints in 2011.
A government pledge in September -- under pressure from
markets and the European Union -- to make further budget cuts
next year has stabilised markets and helped the forint, but
longer-term questions remain.
"We maintain our view that government fiscal consolidation
plans are ultimately unsustainable and not likely to bring a
lasting reduction in the risk premium or long-term interest
rates," Goldman Sachs wrote in a Sunday note.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.608 24.588 -0.08% +6.95%
Polish zloty <EURPLN=> 3.97 3.962 -0.2% +3.38%
Hungarian forint <EURHUF=> 271.72 271.27 -0.17% -0.5%
Croatian kuna <EURHRK=> 7.314 7.345 +0.42% -0.07%
Romanian leu <EURRON=> 4.27 4.267 -0.07% -0.76%
Serbian dinar <EURRSD=> 107.1 107.06 -0.04% -10.48%
All data taken from Reuters at 0933 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Catherine Evans)
