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CEE MARKETS-Dinar firms ahead of rating reviews, CEE units rebound

* Dinar sets new 17-month high, S&P may upgrade Serbia's rating

* Serbian president names next PM after months, reforms seen kept

* CEE currencies regain ground after slide due to dollar buying

(Updates with new dinar high, Serbian central bank's market intervention, quote on zloty) BUDAPEST/BELGRADE, June 16 (Reuters) - 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 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 Thursday. 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

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

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

STOCKS

Latest Previo Daily Change

us

close change in

2017

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

4% BONDS

Yield Yield Spread Daily (bid) change vs change Bund in Czech spread

Republic

2-year -0.039 0.019 +060b +1bps

ps

5-year -0.005 0.034 +038b +4bps

ps

10-year 0.923 0.063 +063b +6bps

ps Poland

2-year 1.931 0.013 +257b +1bps

ps

5-year 2.573 0.011 +296b +2bps

ps

10-year 3.149 0.008 +286b +1bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.34 0.42 0.51 0

IBOR=>

Hungary <BU 0.19 0.22 0.28 0.15

BOR=>

Poland <WI 1.76 1.78 1.8 1.73

BOR=>

Note: FRA are for ask quotes prices ********************************************************** ****

(Additional reportin by Bartosz Chmielewski in Warsaw; Editing