Zloty pares losses on c.bank, finmin support

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WARSAW, March 2 (Reuters) - The Polish zloty pared losses on Wednesday after both the central bank and the finance ministry moved to support a currency that had sunk to a 13-year low in a selloff sparked by Russia's invasion of Ukraine.

The National Bank of Poland (NBP) said it had sold foreign currencies for zlotys for the second day in a row, while the finance ministry said it would exchange most foreign currency funds in the market rather than in the central bank.

Russia's attack and the resulting raft of sanctions unleashed on Moscow had sent the zloty to its weakest level since February 2009, while the Hungarian forint hit a fresh record low.

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"The NBP together with the Ministry of Finance will be trying to do whatever it takes to strengthen the zloty to fight with inflation," said Mateusz Sutowicz, a financial market analyst at Bank Millennium.

At 1534 GMT, the zloty was 0.49% softer on the day versus the euro at 4.77. It had earlier been as weak as 4.8335.

The Hungarian forint was 1.16% weaker against the euro at 381.50. The Czech crown slid 1.12% to 25.72, while the Romanian leu was little changed at 4.9485.

The National Bank of Hungary said on Tuesday it was ready to intervene "at any moment" to ensure the stability of local financial markets, while Poland's central bank said it was ready to react to excessive moves in the currency.

Prior to the NBP's announcement on Wednesday, a Warsaw-based trader told Reuters that the central bank had been active in the market. "We've got the central bank that is hitting the bid from time to time," the trader said. "I wouldn't call it a very big intervention but they occasionally call out."

Stocks were higher in Budapest and Warsaw, with Polish coking coal producer JSW (JSW.WA) rising 23% on the back of potential sanctions against coal imported from Russia.

On Tuesday, Polish Prime Minister Mateusz Morawiecki said Poland wanted the strongest possible sanctions to be introduced against Russia, including a ban on the import of coal. read more

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Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague, Gergely Szakacs in Budapest; Editing by Aditya Soni

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