BUDAPEST: News that Romanian Prime Minister Victor Ponta would resign knocked down the leu on Wednesday and the forint hit 5-week lows against the euro amid a torrent of dovish comments from the Hungarian central bank.
The leu fell 0.34 percent to 4.466 against the euro by 0858 GMT after the head of Romania's ruling Social Democrat Party said that Ponta would resign.
The prime minister has long been under pressure to quit, with corruption proceedings under way against him, but he is resigning due to mass protest after a nightclub fire killed 32.
The forint shed a third of a percent to trade at 314.30, while Poland's zloty firmed 0.1 percent to 4.248 versus the euro.
Central bankers remain dovish in the European Union's emerging markets and can loosen policy further due to low inflation, fears that economies can slow down and a policy of monetary stimulus in the euro zone and elsewhere in the world.
Analysts expect the Polish central bank to keep its interest rates on hold at its meeting today.
But expectations for rate cuts early next year have become dominant since the eurosceptic Law and Justice party (PiS) won elections in Poland last month, urging lower interest rates and a cheap loan programme from the central bank.
PiS copies unorthodox policy measures already tested in Hungary under central bank governor and former economy minister Gyorgy Matolcsy, a close ally of Prime Minister Viktor Orban.
The Hungarian bank raised the flag of further monetary loosening on Tuesday, extending its funding for growth scheme and launching an interest rate swap facility for banks.
The forint fell on the news and extended its loss after the bank's Deputy Governor Marton Nagy said on Wednesday that the bank could help interest rates fall with further unorthodox measures and that exchange rate changes were not a worry.
A Budapest-based dealer said the forint fall was unlikely to herald a shift in the past few month's forint ranges.
"This can mean though that it will not firm through 309," the dealer added. "Bigger demand for government bonds (encouraged by central bank measures) can offset the negative impacts."
A fixed income trader said bonds moved little as investors waited for details of the new central bank measures.
In Poland, there is a risk to the zloty because the Constitutional Court is due to decide at around 1500 GMT on whether the 2013 pension fund reform, which resulted in transferring bond holdings from private pension funds to the state, was constitutional, the daily Gazeta Wyborcza said.
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