* Dinar sets new 17-month high, S&P may upgrade Serbia's
* Serbian president names next PM after months, reforms seen
* CEE currencies regain ground after slide due to dollar
(Updates with new dinar high, Serbian central bank's market
intervention, quote on zloty)
By Sandor Peto and Aleksandar Vasovic
BUDAPEST/BELGRADE, June 16 The dinar hit
17-month highs against the euro, helped by Serbia's reforms to
improve revenue collection, which may yield a credit rating
upgrade from Standard & Poor's on Friday, while other Central
European currencies also firmed.
The dinar traded at 121.94 against the euro at
1244 GMT, up 0.2 percent, even though it was off 121.86 touched
earlier, its strongest level since January last year.
Two and a half months after winning presidential elections
and quitting the post of prime minister, Aleksandar Vucic named
his successor, Ana Brnabic, late on Thursday.
Little is known about the political preferences of Brnabic
but she is expected to keep to investor-friendly policies.
"She will be remotely controlled (by the president) and her
job will be not to deviate an inch from present policies that
have been agreed with the World Bank and the IMF," Sasa Djogovic
at the Belgrade-based Institute for Market Research said.
Blue Bay Asset Management analyst Timothy Ash said the
nomination "shows the strength of Vucic's own domestic political
position - given his three straight election wins now, and also
likely his own confidence in the abilities of Brnabic".
Central Europe's main currencies also strengthened,
regaining some of the ground that they lost after Wednesday's
hawkish Federal Reserve comments triggered dollar buying.
The dinar escaped Thursday's selling wave.
While domestic markets are illiquid, euro supply is boosted
by Serbians living abroad returning for holidays, Djogovic said.
The fundamental support to the dinar is the fiscal reforms
which secured a budget surplus worth 1.2 percent of GDP in the
first quarter of 2017 instead of a deficit agreed with the
International Monetary Fund.
Serbia's central bank continued euro buying interventions in
the market on Friday to stem the gains of the dinar, dealers
said. The bank bought about 250 million euros this year until
Both Standard & Poor's and Fitch are due to review their
credit ratings to Serbia on Friday.
"S&P has had Serbia on positive outlook since the last year
while strong fiscal consolidation and political commitment to
deepening the reform zeal are likely to win Serbia one notch
upgrade," Raiffeisen analyst Gintaras Shlizhyus said in a note.
"Meanwhile, Fitch would be likely to upgrade its outlook to
positive for the same reasons," he said.
The zloty firmed 0.4 percent versus the euro,
clawing back half of what it lost on Thursday when domestic
markets were closed due to a national holiday.
"Today domestic investors returned... and the situation has
stabilized," said ING BSK senior economist Piotr Poplawski.
CEE MARKETS SNAPSH AT 1444 CET
Latest Previo Daily Change
bid close change in
Czech crown 26.237 26.262 +0.10 2.93%
0 5 %
Hungary 307.88 308.20 +0.11 0.31%
forint 00 50 %
Polish zloty 4.2170 4.2336 +0.39 4.43%
Romanian leu 4.5815 4.5854 +0.09 -1.01%
Croatian kuna 7.4000 7.3995 -0.01% 2.10%
Serbian dinar 121.94 122.15 +0.17 1.16%
00 00 %
Note: daily calculated previo close 1800
change from us at CET
Latest Previo Daily Change
close change in
Prague 995.53 996.74 -0.12% +8.02
Budapest 35658. 35534. +0.35 +11.4
76 50 % 2%
Warsaw 2303.9 2295.9 +0.35 +18.2
8 9 % 8%
Bucharest 8439.3 8406.2 +0.39 +19.1
8 9 % 2%
Ljubljana 784.23 786.18 -0.25% +9.29
Zagreb 1857.7 1855.8 +0.10 -6.87%
7 4 %
Belgrade 710.41 718.61 -1.14% -0.97%
Sofia 681.09 683.66 -0.38% +16.1
Yield Yield Spread Daily
(bid) change vs change
2-year -0.039 0.019 +060b +1bps
5-year -0.005 0.034 +038b +4bps
10-year 0.923 0.063 +063b +6bps
2-year 1.931 0.013 +257b +1bps
5-year 2.573 0.011 +296b +2bps
10-year 3.149 0.008 +286b +1bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep <PR 0.34 0.42 0.51 0
Hungary <BU 0.19 0.22 0.28 0.15
Poland <WI 1.76 1.78 1.8 1.73
Note: FRA are for ask
(Additional reportin by Bartosz Chmielewski in Warsaw; Editing
by Toby Chopra)