* Czech central bank cuts base rate by 50bps * NBH announces emergency steps to help businesses * Hungarian forint weakens to fresh all-time low vs euro * Czech crown plunges 3.5%, Prague stocks at 11-year low (Recasts with Czech emergency rate cut, Hungary central bank actions; updates markets) By Anita Komuves and Jason Hovet BUDAPEST/PRAGUE, March 16 (Reuters) - The Czech central bank on Monday cut its main interest rate and the National Bank of Hungary announced a series of steps to help the economy deal with the effects of the coronavirus, as regional currencies fell to new record lows and stock indexes plunged. The Czech central bank cut its main interest rate by 50 basis points to 1.75% at an extraordinary meeting on Monday and said it was ready to decrease rates further if the economy needed it amid the coronavirus outbreak. The Czech crown sank 3% to the 27 per euro level, wiping out all its gains since the central bank released it from an intervention regime keeping it weak in April 2017. The central bank had intervened in markets between 2013 and 2017 as part of its ultra-loose monetary policy, buying up tens of billions euros through the regime. In the months before it ended the regime in 2017, investors had piled into the crown to take advantage of the expected firming after the crown was set free. Most investors have stuck in that positioning since then although the recent market panic has sent many fleeing, causing the crown to lose more than others in central and eastern Europe. "The move is a clear result of the crown's overboughtness, because the positioning was very heavy," said Jakub Seidler, ING's chief economist in Prague. "Even investors who were patient (since the end of the intervention regime in 2017) are very likely exiting positions. So it is a result of this positioning ... With the market in a panic mood, people are exiting." Prague stocks fell 7.76% to their lowest levels since April 2009. The Hungarian forint fell to 345 to the euro, a fresh record low, and traded at 343.80 at 1611 GMT. The NBH announced emergency steps on Monday to help businesses, boosting the range of collateral it accepts from banks and calling on lenders to apply a loan repayment moratorium for firms hit by the coronavirus economic fallout. The NBH also injected liquidity into the banking sector by accepting total bids worth 748 million euros from commercial banks for its swaps providing forint liquidity at a Monday tender, way above its 308 million euro offer. The NBH will also launch one-week foreign currency swap tenders to provide local banks with forint liquidity. Hungarian government bond yields jumped on Monday, with the yield on the 10-year bond rising 46 basis points to 3.26% and the five-year yield surging 37 basis points to 2.27% according to the fixings of debt agency AKK. Equities in Budapest were down 5.51% by the end of the trading day. The forint first plunged to a new all-time low on Monday shortly after Prime Minister Viktor Orban told the Parliament that Hungary would need monetary and fiscal tools to tackle the expected grave economic impact from the coronavirus. The Polish central bank was conducting repo operations on Monday as an extraordinary measure to improve liquidity in the bond market, dealers and analysts said. Some analysts are also expecting a rate cut as early as Tuesday, when the Monetary Policy Council will hold a regular monthly meeting. The Polish central bank does not take generally rate-setting decisions at regular sittings but the situation may require extraordinary steps, analysts said. Central banks around the world have cut rates and announced stimulus measures in recent days to ease the economic fallout from the spread of the coronavirus. CEE SNAPSHOT AT MARKETS 1711 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.2100 26.2700 -3.45% -6.53% crown Hungary 343.8000 340.2900 -1.02% -3.68% forint Polish 4.4248 4.3751 -1.12% -3.81% zloty Romanian 4.8409 4.8260 -0.31% -1.09% leu Croatian 7.6170 7.5701 -0.62% -2.25% kuna Serbian 117.6600 117.7300 +0.06% -0.08% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 761.12 825.1500 -7.76% -31.78% Budapest 32304.48 34189.09 -5.51% -29.90% Warsaw 1341.54 1365.97 -1.79% -37.61% Bucharest 7126.73 7882.19 -9.58% -28.57% Ljubljana 725.41 762.12 -4.82% -21.65% Zagreb 1405.52 1512.15 -7.05% -30.33% Belgrade <.BELEX15 697.77 714.24 -2.31% -12.96% > Sofia 423.96 447.95 -5.36% -25.38% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.9560 0.3270 +283bps +29bps > 5-year <CZ5YT=RR 1.6380 0.1230 +233bps +3bps > 10-year <CZ10YT=R 1.1040 0.0000 +157bps -12bps R> Poland 2-year <PL2YT=RR 1.2170 -0.2120 +209bps -25bps > 5-year <PL5YT=RR 1.7200 -0.0770 +241bps -17bps > 10-year <PL10YT=R 2.2770 0.4440 +275bps +33bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 1.83 1.39 0.73 2.31 PRIBOR=> Hungary < 0.62 0.64 0.68 0.67 BUBOR=> Poland < 1.16 1.01 0.78 1.69 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** ($1 = 0.8945 euros) (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Sherry Jacob-Phillips and Maju Samuel)
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