The currencies in Central and Eastern Europe have done, but it could be worse to come, that the banks in the euro zone to win their horns.

Most of the large current account deficits in the world of emerging markets in Central and Eastern Europe and the region has a high degree of dependence on the export. It is in the eye of the global economic storm.

The Hungarian forint fell to its lowest level against the euro this month Ft304.25, and it is 12 percent compared to the single currency this year.

Poland zloty fell to a period of five years against the euro and the weak is a decrease of 11 percent this year. The Czech crown is a lowest level in three years against the euro, a decrease of 7 percent since the beginning of the year.

The countries of the region are characterized as from the emerging countries, the weakest in the global crisis. Will they deal with increasing problems of financing of current accounts at large and to reimburse the foreign debt, the analysts say.

Poland, the Czech Republic and Hungary have foreign debt bills this year, about 100 billion U.S. dollars, according to ING Financial Markets, the battle for them to reimburse, as access to the markets of the still limited resources.

Hungary was forced to ask for help, the International Monetary Fund to cover the refunds. Analysts say it is inconceivable that Poland and the Czech Republic finds itself in the same situation.

Gerard Lyons of Standard Chartered has written: “The dependence of the values is alarming when one considers the global impact of the crisis in international credit markets. With the collapse of exports and foreign direct investment plans on hold, the net result is a major rotation of the Capital flows to emerging economies. ”
According to the Institute for International Finance, net loans of commercial banks in the emerging markets is of a flood of 410bn $ 2007 $ 67bn in 2008, and one sees the transition to a throughput of $ 61bn this year. “Even the May be too optimistic,” says Lyons. “The extent of the problem can be very vulnerable Eastern Europe.”

Nigel Rendell, senior emerging markets strategist at RBC Capital Markets, said: “Eastern Europe is a region which are in the greatest difficulties. I expect the currency in most of these countries to cope with new lows.

“It is not possible that the Russian ruble fell. This affects the Eastern European currencies. In contrast to Russia, these countries do not have a large foreign exchange reserves set to”.

Hans Redeker at BNP Paribas is a clear similarity between the economic and financial conditions in emerging countries in Europe and the Asian economies before the crisis of 1998. The Asia crisis was accompanied by a rapid growth of lending to the private sector, with a large proportion of loans in foreign currencies.

East Asian savings also have the shortcomings of the current large, especially by the private sector. These deficits were accompanied by a strong inflow of the debt that suddenly reversed after the crisis.

Before the credit crisis, the need for external financial resources heavily in Eastern Europe have, in most cases in the form of direct investment in the euro area.

Euro, banks have the largest exhibition in Central and Eastern Europe, with the passive 1500bn $, about 90 percent of the total amount of the exhibition of foreign banks in the region.

Analysts warn that the banks in the euro area, particularly those who had state aid, rarely go to the importance of debt that reached in the coming months.

Credit Suisse believes that $ 9bn debt in foreign currency is in Hungary in the next three months, while in Poland, the value of $ 23bn.

The reaction of central banks in the region of the slowdown, the situation.

Ulrich Leucthmann Commerz Bank said the central banks have interest rates at a pace in a weak effort to the local economy, without that the external value of its currency. Hungary has the IMF for help in October, but is not obligated to give that advice to slow the rate.

Poland, the restrictive fiscal policy in an effort to reduce the deficit of the households in the limits set by the Maastricht criteria for entry into the euro zone.

Mr. Leucthmann says the only solution for the central banks in the region against further interest rate cuts and to declare that the market they are concerned about the external value of its currency.

“At this stage it is not safe, but even if this measure was placed on the sale of the Hungarian forint, Polish zloty and Czech koruna,” he says