CEE MARKETS 1-Czech crown steady at target after c.bank intervenes

Fri Nov 8, 2013 4:55am EST

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  By Jason Hovet      PRAGUE, Nov 8 (Reuters) - The Czech crown hung just on the  strong side of 27 to the euro on Friday, the target the  country's central bank set the day before when it launched  massive interventions to weaken the currency in a record drop.      The central bank, after mulling the use of interventions for  a year, took traders by surprise on Thursday with the launch of  crown sales on the open market for the first time in over a  decade.      The bank wants to keep the exchange rate close to 27 crowns  to the euro, it said, to help stem a slowdown in inflation.         By 0930 GMT, the crown was steady, bid at 26.964  per euro, after a nearly 5 percent drop on Thursday. Other  emerging European currencies were mostly firming, with Hungary's  forint up 0.3 percent.      Dealers and analysts said the Czech central bank's  intervention amounted to between 2 billion to 5 billion euros on  Thursday, several times higher than the daily spot average.         But the bank was not in the market on Friday, they said.      "I haven't seen them," said one Prague dealer that had done  deals with the central bank on Thursday.      Czech Governor Miroslav Singer told a news conference on  Thursday that the bank had unlimited means to intervene against  its own currency and would not end the campaign until it was  very confident it would not have to start intervening again.       "It is absolutely clear to us that we are in for the long  term," Singer said.      In a note on Thursday, RBS said Singer's intent was clear  and the crown would now likely fall into a tight range.      "Given the intent of Governor Singer, we find it unlikely  that the market will look to test his desired "close to 27"  EURCZK level and therefore anticipate that the cross will now  trade in a new, much higher and tighter range," RBS said.       "We therefore think that any significant moves away from the  27.0 level in either direction are moves to be faded."      KBC said the "following days and weeks will show how  tolerant the (central bank) will be to any eventual crown  strengthening."                    CEE MARKETS SNAPSHOT AT 1034 CET   ************************** CURRENCIES ************************                               Latest  Previous   Daily   Change                               bid     close      change  in 2013   Czech crown                 26.964    26.972  +0.03%  -7.11%   Hungarian forint           295.800   296.620  +0.28%  -1.64%   Polish zloty                 4.181     4.186   +0.11%  -2.56%   Romanian leu                 4.439     4.436   -0.07%  +0.09%   Croatian kuna                7.619     7.620   +0.02%  -0.89%   Serbian dinar              113.960   113.950    -0.01%   -1.46%   Note: daily change calculated from previous close at 1700 GMT   **************************** STOCKS **************************                               Latest  Previous   Daily   Change                                       close      change  in 2013   Prague                      1032.07    1041.39   -0.89%  -0.64%   Budapest                  18794.56  18897.17    -0.54%  +3.42%   Warsaw                     2511.18   2527.66    -0.65%  -2.78%   Bucharest                  6190.03   6234.28   -0.71%  +20.21%   ***************************** BONDS **************************                           Yield    Yield    Spread    Daily                           (bid)    change   vs Bund   change in   Czech Republic                                      spread     2-year                0.186    -0.029   +8bps     -5bps     5-year                1.016     -0.244   +36bps      -27bps    10-year                2.307    -0.022   +60bps     -4bps   ******************* FORWARD RATE AGREEMENTS ******************                                3x6     6x9    9x12  3M interbank   Czech Rep                    0.390   0.400  0.400   0.44   Hungary                      3.160   3.240  3.320   3.36   Poland                       2.680   2.700  2.780   2.66   Note: FRA quotes are for ask prices   **************************************************************     For related news and prices, click on the codes in brackets: All  emerging market news     Spot FX rates  Eastern Europe spot FX  Middle East spot FX Asia  spot FX          Latin America spot FX Other  news and reports  World central bank news Economic Data  Guide Official rates   Emerging Diary   Top events  Diaries Diaries Index  

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