CEE MARKETS-Forint holds gains on signs IMF deal closer

BUCHAREST, Oct 8 (Reuters) - Emerging European currenciesedged lower on Monday, while signs Hungary is moving closer toan international financing deal helped the forint hold on toFriday's sharp gains.

Budapest scrapped a disputed tax on its central bank andunveiled a swathe of new measures on Friday to keep its deficitunder control, removing an obstacle to an International MonetaryFund deal and sending the forint up more than 1 percent.

The forint

was bid 0.1 percent lower on the day at282.62 per euro by 0740 GMT and one dealer said the eventualsigning of an IMF deal to help Hungary's financing could pushthe forint above 280.

"We are drifting in the 282-283 range, I do not expect majorflows today," the Budapest-based currency dealer said. "Overall,the region looks pretty calm."

The cost of insuring Hungary's debt against a default forfive years

sank to around 340 basis points, itslowest level since August 2011, but markets will remain on edgeuntil a deal is actually signed.

"A fault confessed is half redressed," Commerzbank said in anote. "Until the EU and IMF give the all clear, risk continuesto concentrate on the upper end in EUR-HUF."

Elsewhere, assets were pressured by a bearish mood on globalstock markets after the World Bank cut growth forecasts for Asiaand underlined concerns over the global economic outlook.

Stocks fell across central Europe, led by near 1 percentdrops in Budapest

and Bucharest.The Czech crown

slipped 0.3 percent after datashowed a bigger-than-expected fall in industrial output andraised expectations of a fourth straight quarter of recession.

"The data published today can hardly be interpreted as goodnews for the Czech crown," said Raromir Jac, analyst at GeneraliPPF Asset Management.


remained near two-month lows as traderstested the level at which the central bank - which has oftenintervened to support the currency - would step in.

Poland's zloty

was 0.1 percent lower, with marketsweighing the prospect of monetary policy easing after a centralbanker said he may vote for an interest rate cut in November.

--------------------------MARKET SNAPSHOT--------------------

Currency Latest Previous Local Localclose currency currencychange changetoday in 2012Czech crown24.89 24.826 -0.26% +2.63%Polish zloty4.069 4.067 -0.05% +9.72%Hungarian forint282.62 282.3 -0.11% +11.32%Croatian kuna7.478 7.478 0% +0.51%Romanian leu4.575 4.566 -0.2% -5.55%Serbian dinar114.86 114.87 +0.01% -6.89%

All data taken from Reuters at 0940 CET.

Currency percent change calculated from the daily domestic

close at 1600 GMT.

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