BUDAPEST/WARSAW: The kuna fell on Wednesday due to uncertainty over the debt of Croatia's biggest private firm, Agrokor, while other Central European currencies firmed after the Polish and Romanian central bank kept interest rates on hold.
The kuna touched 8-week lows against the euro and, trading at 7.45 per euro at 1248 GMT, it eased 0.2 percent. Zagreb stocks fell 2.1 percent, bucking a rise in the region's main equities indices.
Croatia's parliament could pass an emergency law as early as Wednesday to shield the economy from big company failures after food and retail company Agrokor piled up debts, leaving it struggling to pay creditors and suppliers.
Shares in Agrokor unit Ledo, which makes ice-cream, fell 13 percent to 8-year lows, and have shed 30 percent since Monday.
Elsewhere, the zloty, firmed 0.4 percent and the leu gained 0.1 percent.
Decisions by the Polish and Romanian central banks to keep interest rates on hold had been expected. The Polish central bank was to hold a news conference later on Wednesday.
Investors scaled back expectations for a shift to more hawkish rhetoric by the Polish central bank after flash figures for March, published on Friday, showed a lower than expected 2 percent annual inflation rate.
"I don't think that the zloty's strengthening results from the fundamentals. I would rather assign it to technical reasons," said Mateusz Sutowicz, analyst at the Warsaw-based Bank Millennium.
The direction of inflation trends in Poland often heralds changes across the region.
Wednesday's February Czech retail figures showed a slowdown in annual sales growth to 0.6 percent.
PMI manufacturing indexes released in the region on Monday were below forecasts, but still showed steady growth.
Hungary's retail sales have also slowed.
According to Wednesday's figures, Hungary's unadjusted February industrial output slowed to 2.7 percent from 6.5 percent in January, but the change was caused by one less working day than a year ago and the underlying trend is still upwards, analysts said.
The forint eased slightly but stayed near the psychological important barrier of 310 against the euro, around which it has been hovering for months.
The leu gained a quarter of a percent, trading at 4.531 versus the euro, after the Romanian central bank kept rates on hold and its governor Mugur Isarescu said inflation will be significantly below the lower side of the target range over the next few months.
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