BUDAPEST: Central European currencies firmed on Thursday, with the dinar rebounding from 13-month lows, as equities tracked a rebound in stock markets in the developed world ahead of the G20 meeting in Shanghai.
The forint and the leu firmed 0.2 percent against the euro by 0937 GMT, the zloty and the Czech crown gained 0.1 percent.
The forint again traded on the firmer side of 310, regaining some of the ground it lost on Wednesday after a central bank official did not rule out that the bank would resume rate cuts on top of using unconventional monetary easing tools.
"It would be a big surprise if there is no agreement (at the G20 meeting) to prop up the global economy," Erste group's Hungarian brokerage arm said in a note.
Western European stocks did not follow the slump in Shanghai shares, and Central European equities joined them on the rise.
Magyar Telekom shares jumped about 4 percent after the Deutsche Telekom unit reported higher-than-expected fourth-quarter net profit, helping Budapest's main stock index rise by 1.3 percent.
Prague's main index gained 1.2 percent, helped by a 2.5 percent rise of Austrian-based banking group Erste's stocks .
Government bonds were mostly treading water in the region.
"I don't think there will be any big change until the ECB's (March 10) meeting," one Budapest-based fixed income trader said, adding that bonds could get hit if the ECB does not deliver on expectations for easing its policy further.
Romanian bond yields continued to move higher by a few basis points, with the curve flattening to leave longer maturities yields rising less than shorter yields. Ten-year bonds bid at a yield of 3.39 percent on Thursday.
Those moves started on Wednesday after Romanian central bank Governor Mugur Isarescu told Reuters that monetary tightening could come earlier than expected, although he said "we do not want to boost the leu currency through our measures".
The dinar firmed 0.3 percent to 123.27 against the euro, rebounding from Tuesday's 13-month lows of 123.61.
The Serbian central bank has been intervening to prevent further dinar falls. So far this year it has sold a total of 350 million euros, and purchased 10 million euros to stabilise the dinar which it keeps in a managed float.
Early this month, it became the first central bank in the region to cut interest rates since the Federal Reserve raised rates in December.
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