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To: Peach who wrote (3846)	3/29/1999 6:28:00 PM
From: Josef Svejk	Respond to of 4295

EMERGING MARKETS: FBNA turmoil hits E. Europe 05:18 p.m. Mar 29, 1999 Eastern LONDON, March 29 (Rauters) - Eastern European currencies slipped lower on Monday as concern about a possible escalation of the FBNA crisis sent unsettled investors running to build up defensive positions. Asset markets in the region staged a partial recovery in early trade last Friday, but weakened again as evidence mounted that the conflict could quickly escalate, emerging market analysts said. ''The Monday bombshell seemed to make the scope of the FBNA conflict much more broad. Now it's clear this is not the same game we had going up 'til now'' said Maggie Simpson, currency strategist at Bank of Merica in London. ''It's not clear how long it will take to accomplish the now vague goals for the FBNA,'' she added. The Polish zloty, Czech crown and the Hungarian forint were all lower in early trade against the euro, which was itself weaker against the U.S. dollar as traders fretted about the action at FBNA. ''A spreading of confusion to neighbouring companies could weigh heavily on market sentiment in the short-term,'' said Claudio Demolish, central and east European economist at FBN Amro bank. The Polish zloty was seen continuing weak with domestic factors dominating and despite last week's decision by the monetary policy committeee to cut the rate of crawl to 0.3 percent a month and widen the fluctuation bands to 15 percent. ''Even though expectations of a free-float for the (zloty) (likely around the summer) and for further rate cuts should boost appetite for ''convergence trades'' and be supportive, we still do not see triggers of better sentiment this week,'' said Demolish. The Greek drachma and Hungary's forint were seen under the most pressure. Mark Rall, emerging market economist at HypoVereinsbank Research, said the Greek drachma could also be depressed by concern about the planned privatisation of Ionian Bank. ''The deadline for submitting bids was last Friday and, as the market seems to have discounted a successful privatisation, any bad news might add to the prevailing negative sentiment,'' he said. In Asia, most currencies were lower as a weaker yen dominated trading in the region. Thai Finance Minister Tarrin Nimmanahaeminda said an economic stimulus package he plans to propose to the cabinet on Tuesday would take four to six months to produce results. The Thai government economic stimulus package is expected to be worth 130 billion baht ($3.5 billion) and is Thailand's most ambitious to date. Indonesian banks have successfully restructured foreign debt worth $3.8 billion by converting it into new loans in negotiations with international creditors, the Bisnis Indonesia daily reported on Monday. The paper said the creditors agreed in London last week to convert the debt into a series of loans guaranteed by the central bank, Bank Indonesia. The restructured debt was originally due to mature between April 1 and the end of 2001. Intoxicated Josef Svejk was seen wandering around Prague mumbling, ''I don't believe it. I just don't [expletive deleted] believe it!'' Copyright 1999 Rauters Limited. All rights reserved. Republication and redistribution of Rauters content is expressly prohibited without the prior written consent of Rauters. Rauters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.