CEE MARKETS-Polish zloty, stocks down after EU top court opinion on FX loans

BUCHAREST, Feb 16 (Reuters) - The Polish zloty and stocks fell on Thursday after an opinion by the European Union's top court regarding foreign currency loans that could hit the banking sector, while other equities in central and eastern Europe tracked global indices higher. An adviser to the European Court of Justice said Polish banks may not charge interest on loans that were cancelled by courts for unfair terms. Thursday's opinion was not binding. A final court ruling could be issued before summer recess. The ruling, which carries particular weight in the case of Swiss franc mortgage loans, could cost the Polish banking system 100 billion zlotys ($22.43 billion), according to the country's KNF financial watchdog. Poland's banks index fell 3.0% after the ruling. By 1030 GMT, the blue chip index was down 1.1%, while the Polish zloty was 0.3% weaker against the euro at 4.7775. The zloty is central Europe's worst performer so far this year, down 1.8% overall. "This dispute is probably one of the main reasons why the zloty has significantly underperformed the CEE region this year," ING Bank said in a research note before the opinion. "It is hard to say ... how clear the decision will be. However, in any case it is an important tail risk for the zloty and Polish government bonds." ING has said that if banks were forced to build up provisions in a short time following a negative ruling, then their capacity to fund government borrowing would be weakened and lower demand at debt tenders could push yields higher. Elsewhere in the region, the Hungarian forint was down 0.3% versus the euro on the day, reversing some of its gains from previous sessions. The Czech crown was down 0.2%. The Romanian leu was flat. On Wednesday, Romania's central bank governor said the country's gaping external shortfall was a concern and needed to be corrected gradually, possibly through a weaker currency. Hungary's blue chip index was 0.4% firmer on the day, while Romania's rose 0.3%.

CEE SNAPSHO AT

MARKETS T 1244

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 Czech <EURCZK= 23.6740 23.6350 -0.16% +2.04% crown >
Hungary <EURHUF= 382.500 381.500 -0.26% +4.43% forint > 0 0
Polish <EURPLN= 4.7755 4.7625 -0.27% -1.80% zloty >
Romanian <EURRON= 4.9003 4.8990 -0.03% +0.86% leu >
Croatian <EURHRK= 7.5330 7.5365 +0.05% +0.05% kuna >
Serbian <EURRSD= 117.200 117.300 +0.09% +0.09% dinar > 0 0
Note: calculated from 1800
daily CET
change

Latest Previou Daily Change s

close change in 2023 Prague 1404.97 1407.12 -0.15% +16.91 00 % Budapest 46420.1 46265.4 +0.33% +6.00% 4 2
Warsaw 1851.05 1870.03 -1.01% +3.29% Buchares 12431.6 12386.3 +0.37% +6.59% t 6 4
Ljubljan <.SBITOP 1196.64 1192.71 +0.33% +14.10 a > % Zagreb 2152.34 2156.89 -0.21% +719.1 0% Belgrade <.BELEX1 869.08 869.08 +0.00% +5.39% 5>
Sofia 607.90 607.59 +0.05% +1.07%

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
2-year <CZ2YT=R 5.6990 -0.1830 +284bp -17bps R> s
5-year <CZ5YT=R 4.9750 -0.0890 +246bp -8bps R> s

<CZ10YT= 4.6830 -0.0860 +222bp -8bps 10-year RR> s
Poland
2-year <PL2YT=R 6.2630 0.0240 +340bp +3bps R> s
5-year <PL5YT=R 6.1240 -0.0580 +360bp -5bps R> s

<PL10YT= 6.1770 -0.0190 +371bp -1bps 10-year RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech 7.17 6.99 6.49 7.20 Rep <PRIBOR=

>
Hungary 14.98 13.58 12.38 16.15 Poland 6.96 6.90 6.57 6.93 Note: are for ask
FRA prices
quotes

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($1 = 4.4588 zlotys) (Reporting by Luiza Ilie in Bucharest and Alan Charlish in Warsaw; Editing by Emelia Sithole-Matarise)

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