BUDAPEST: Central European currencies and government bonds mostly gained on Tuesday, recovering from a moderate decline after Greece rejected the terms of a debt bailout in a referendum on Sunday.
Euro zone leaders will meet after local markets close to try to come up with a new bailout agreement. Without further aid, Greece is in danger of falling out of the euro zone.
But the main signs of fear that Greece's problems will spread were a 0.1 percent easing by the forint and the zloty, the region's most liquid currencies, against the euro by 1005 GMT. Most regional equities also eased mildly.
Greek banks own about 22 percent of banking assets in Bulgaria, 15 percent in Serbia and 12 percent in Romania, but the currencies in all three held their ground.
Serbia's central bank, which manages the dinar in a tight range, sold the currency in the market, knocking it off 12-week highs to 120.30 per euro.
But the Greek worry will probably lead the bank to keep rates on hold on Thursday instead of cutting them. The most liquid unit in the south, the leu , firmed 0.1 percent.
"With market players reducing their positions ahead of the Greek referendum, we expect EUR/RON to remain in yesterday's range, and will keep a close eye on European summit news flow," ING's Romanian unit said in a note.
The currency of Croatia, which has no Greek-owned banks, strengthened 0.4 percent and at 7.572 was near its strongest against the euro in four weeks.
According to a local media report, tour operators hope that tourists scared off by Greece's problems will choose the beaches of nearby Croatia. Tourism has been healthy in any case, with hotels almost full, keeping up demand for kuna.
The Czech crown firmed 0.25 percent to 27.1 against the euro. But a dealer said investors are unlikely to test the central bank's limit on the currency's value - 27 to the euro - after it surged in thin turnover on Friday.
"Actually, it is the market itself that holds it above 27," one Prague-based dealer said. "When it comes close, people buy it, because there is a mood that the central bank might act."
Some investors remain worried over Greece.
"The proximity of countries such as Serbia, Macedonia and Albania to all of this must ring an alarm bell amongst EU politicians that an agreement on the Greek debt issue is urgently needed," Commerzbank said in a note, adding that Bulgaria's banking sector was also threatened.
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