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Radu-Sorin Marinas

CEE MARKETS-Forint extends losses on hints of fresh rate cut

29 Jun 2020

By Radu-Sorin Marinas BUDAPEST, June 29 Hungary's forint extended last week's losses on Monday, underperforming the region, after a central banker said there was more scope for easing after a surprise interest rate cut last week. By 0930 GMT, the forint, central Europe's worst-performing currency so far this year, was down 0.18% to trade at 355.75 to the euro, close to two-month lows. The Polish zloty, the Romanian leu and the Czech crown were virtually unchanged, in thin trading. "The FX market is rather worried that the forint will be wholly exposed to volatility as soon as the next risk off move hits EM assets," Commerzbank analysts said in a note. They added that with another 15 basis point rate cut now being priced in for July, the forint weakened towards the end of last week and "is likely to continue to underperform in the months ahead." Deputy Governor Barnabas Virag said on Friday the National Bank of Hungary may cut its base rate by another 15 basis points in July, adding that market pricing of further aggressive rate easing was exaggerated. CEE SNAPSHOT AT 1135 MARKETS CET CURRENCIES Latest Previous Daily Change bid close change in 2020 Czech 26.7670 26.8000 +0.12% -4.99% crown Hungary 355.7500 355.1000 -0.18% -6.92% forint Polish 4.4605 4.4620 +0.03% -4.58% zloty Romanian 4.8440 4.8417 -0.05% -1.15% leu Croatian 7.5720 7.5575 -0.19% -1.67% kuna Serbian 117.5400 117.5600 +0.02% +0.03% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 922.21 920.8800 +0.14% -17.34% Budapest 36285.41 36360.44 -0.21% -21.26% Warsaw 1759.91 1759.43 +0.03% -18.15% Buchares 8610.96 8603.86 +0.08% -13.69% t Ljubljan 854.74 857.37 -0.31% -7.68% a Zagreb 1596.12 1590.84 +0.33% -20.88% Belgrade 663.51 660.40 +0.47% -17.24% Sofia 454.08 455.15 -0.24% -20.08% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 0.1010 0.0380 +081bps +5bps 5-year 0.3520 -0.1070 +106bps -11bps <CZ10YT=RR 0.8100 0.0350 +128bps +3bps 10-year > Poland 2-year 0.1500 -0.0030 +086bps +0bps 5-year 0.7500 0.0190 +146bps +1bps <PL10YT=RR 1.3690 -0.0110 +184bps -2bps 10-year > FORWARD 3x6 6x9 9x12 3M interban k Czech <P 0.29 0.29 0.31 0.34 Rep RIBOR=> Hungary <B 0.61 0.55 0.49 0.74 UBOR=> Poland <W 0.22 0.23 0.24 0.26 IBOR=> Note: are for ask prices FRA quotes ***************************************************** ********* (Additional reporting by jason Hovet in Prague; Editing by Kirsten Donovan)

Drought-hit Romanian wheat crop should still meet Egypt tenders

18 May 2020

BUCHAREST Romania's wheat output is expected to fall sharply this year due to a prolonged drought, but the Black Sea exporter should still amass enough of a surplus to offer in Egypt's international grain tenders, farmers and experts said on Monday.

UPDATE 1-Drought-hit Romanian wheat crop should still meet Egypt tenders

18 May 2020

BUCHAREST, May 18 Romania's wheat output is expected to fall sharply this year due to a prolonged drought, but the Black Sea exporter should still amass enough of a surplus to offer in Egypt's international grain tenders, farmers and experts said on Monday.

UPDATE 1-CEE MARKETS-Crown falls on deeper than expected rate cut, other FX up

07 May 2020

(Updates with Czech rate cut) (.) By Radu-Sorin Marinas BUDAPEST, May 7 Central European currencies edged up on Thursday, mirroring a recovery of the euro, although a deeper than expected rate cut by the Czech central bank dragged the crown down to the week's lowest levels. The euro inched up after three days of losses, but traders remained cautious amid concern over the European Central Bank's stimulus scheme following a German court ruling this week. The euro zone is Central Europe's main trading partner. By 1320 GMT, the Czech crown had reversed earlier gains, trading 0.3% lower at about 27.2 per euro. The Polish zloty and the Hungarian forint were 0.2% up on the day. The Romanian leu was flat. The Czech National Bank (CNB) cut its main interest rate by a bigger-than-expected 75 basis points on Thursday, the third in a series of big reductions as it seeks to soften the economic blow of the coronavirus outbreak. The move brings the two-week repo rate to 0.25%. Markets had largely expected a 50 basis point cut. "The CNB is likely to keep all doors open, with everyone likely to pay close attention to what it might have to say regarding the extended possibilities for asset purchases," analysts at Commerzbank said. The CNB cut rates by 125 basis points in two moves in March to bring the key rate to 1.00%, reversing more than two years of tightening. Some central bankers have talked about the CNB being able to eventually cut to technical zero - a level of 0.05% that it maintained in 2012-2017 as part of an ultra-loose policy. The Czech parliament approved a bill last month granting the monetary authority wider powers to buy assets in financial markets, although the bank has said it does not plan to use its new powers at the moment. Regional stocks rose in line with other emerging markets after stronger-than-expected Chinese export numbers boosted hopes China can rebound quickly and help revive global growth in the aftermath of coronavirus-related shocks. Prague led regional stocks higher together with Bucharest's with a 0.8% increase, followed by Warsaw with 1.8% and Budapest with 0.3%. CEE SNAPSHOT AT MARKETS 1523 CET CURRENCIES Latest Previous Daily Change bid close change in 2020 Czech 27.1700 27.1320 -0.24% -6.40% crown Hungary 350.0000 351.0000 +0.29% -5.39% forint Polish 4.5488 4.5557 +0.15% -6.43% zloty Romanian 4.8255 4.8280 +0.05% -0.77% leu Croatian 7.5670 7.5673 +0.00% -1.61% kuna Serbian 117.5100 117.5700 +0.05% +0.05% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 880.21 872.7100 +0.86% -21.10% Budapest 34613.93 34557.17 +0.16% -24.89% Warsaw 1595.35 1567.98 +1.75% -25.80% Bucharest 8161.45 8106.93 +0.67% -18.20% Ljubljana 797.54 797.83 -0.04% -13.86% Zagreb 1527.12 1538.99 -0.77% -24.30% Belgrade 662.02 664.54 -0.38% -17.42% Sofia 445.75 448.37 -0.58% -21.54% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 0.3920 -0.1320 +115bps -12bps 5-year 0.7790 0.0490 +151bps +7bps 10-year <CZ10YT=RR 1.1700 -0.1060 +169bps -9bps > Poland 2-year 0.5590 0.0180 +131bps +3bps 5-year 1.0840 0.0260 +182bps +4bps 10-year <PL10YT=RR 1.5510 -0.0130 +207bps +1bps > FORWARD 3x6 6x9 9x12 3M interba nk Czech Rep <P 0.30 0.30 0.29 0.89 RIBOR=> Hungary <B 1.17 1.12 1.08 1.08 UBOR=> Poland <W 0.31 0.32 0.35 0.68 IBOR=> Note: FRA are for ask prices quotes ****************************************************** ******** (Additional reporting Jason Hovet in Prague, Alan Charlish in Warsaw; editing by Kirsten Donovan)

CEE MARKETS-FX edges up on euro recovery, Czechs set to cut rate

07 May 2020

By Radu-Sorin Marinas BUDAPEST, May 7 Central European currencies edged up early on Thursday, mirroring a recovery of the euro, with the Czech crown likely to see little effect from an expected rate cut later in the day by the Czech central bank. The euro inched up after three days of losses, but traders remained cautious amid concern over the European Central Bank's stimulus scheme following a German court ruling this week. The euro zone is Central Europe's main trading partner. By 0920 GMT, the Czech crown had gained 0.2% to trade at about 27.09 per euro. The Polish zloty and the Hungarian forint were 0.1% up on the day. The Romanian leu was flat. "As today's step (by the Czech National Bank) is likely to be largely priced in, the effects on the crown are likely to be limited," analysts at Commerzbank said. "The CNB is likely to keep all doors open, with everyone likely to pay close attention to what it might have to say regarding the extended possibilities for asset purchases." The CNB cut rates by 125 basis points in two moves in March to bring the key rate to 1.00%, reversing more than two years of tightening. Some central bankers have talked about the CNB being able to eventually cut to technical zero - a level of 0.05% that it maintained in 2012-2017 as part of an ultra-loose policy. The Czech parliament approved a bill last month granting the monetary authority wider powers to buy assets in financial markets, although the bank has said it does not plan to use its new powers at the moment. Regional stocks rose in line with other emerging markets after stronger-than-expected Chinese export numbers boosted hopes China can rebound quickly and help revive global growth in the aftermath of coronavirus-related shocks. Prague led regional stocks higher together with Bucharest's with a 0.7% increase, followed by Warsaw with 0.6%. Budapest was down 0.2%. CEE SNAPSHOT AT MARKETS 1220 CET CURRENCIES Latest Previous Daily Change bid close change in 2020 Czech 27.0910 27.1320 +0.15% -6.12% crown Hungary 350.6000 351.0000 +0.11% -5.55% forint Polish 4.5494 4.5557 +0.14% -6.44% zloty Romanian 4.8265 4.8280 +0.03% -0.79% leu Croatian 7.5660 7.5673 +0.02% -1.59% kuna Serbian 117.4700 117.5700 +0.09% +0.09% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 Prague 879.49 872.7100 +0.78% -21.17% Budapest 34407.80 34557.17 -0.23% -25.33% Warsaw 1575.96 1567.98 +0.51% -26.70% Bucharest 8161.52 8106.93 +0.67% -18.20% Ljubljana 796.57 797.83 -0.16% -13.96% Zagreb 1532.58 1538.99 -0.42% -24.03% Belgrade <.BELEX15 662.02 664.54 -0.38% -17.42% > Sofia 445.13 448.37 -0.72% -21.65% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.5320 0.0080 +127bp +0bps > s 5-year <CZ5YT=RR 0.7320 0.0010 +145bp +0bps > s 10-year <CZ10YT=R 1.1430 -0.1320 +165bp -13bps R> s Poland 2-year <PL2YT=RR 0.5540 0.0130 +129bp +1bps > s 5-year <PL5YT=RR 1.0870 0.0290 +180bp +3bps > s 10-year <PL10YT=R 1.5670 0.0030 +207bp +0bps R> s FORWARD 3x6 6x9 9x12 3M interbank Czech Rep < 0.30 0.30 0.31 0.89 PRIBOR=> Hungary < 1.17 1.12 1.08 1.08 BUBOR=> Poland < 0.34 0.34 0.36 0.68 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Anita Komuves in Budapest, Jason Hovet in Prague, Alan Charlish in Warsaw; editing by Larry King)

CEE MARKETS-CEE assets fall as U.S. oil prices turn negative

21 Apr 2020

By Radu-Sorin Marinas and Anita Komuves BUCHAREST/BUDAPEST, April 21 Central European currencies and stocks fell across the board on Tuesday after U.S. crude oil futures plunged into negative territory for the first time the previous day on sagging demand due to the coronavirus crisis. Factory closures and travel curbs enforced to slow the pace of new infections have triggered a collapse in oil prices, drawing money from commodity currencies and other risk assets to the safety of dollar-denominated assets, boosting the greenback. By 0850 GMT, the Hungarian forint was leading regional losses, dropping 0.6% to trade at 354.95 against the euro, with the Polish zloty and the Czech crown both falling by about 0.3%. The forint has nonetheless bounced back from a record low near 370 on April 1 as the central bank tightened its previously ultra-dovish policy. Budapest's blue chip index and Bucharest fell more than regional peers, by about 2.3% on the day, after shares of Hungary's oil company MOL fell 3.6% and Romania's OMV Petrom dropped 4.1% after the price of crude oil crashed on Monday. Prague's eased 1.5% and Warsaw was 1.7% lower. Hungarian Prime Minister Viktor Orban expects to present a plan early next month for a gradual return to normal from the coronavirus lockdown, national news agency MTI quoted him as saying on Monday. There is little clarity about the impact of the crisis on Hungary's economy. The central bank has said repeatedly that it still expects it to keep growing in 2020, while Finance Minister Mihaly Varga expects a 3% recession. Orban on Friday said he would consider it a feat to keep the growth rate around zero. Elsewhere, the Romanian leu was flat, shrugging off widely expected news that Fitch revised the country's outlook to negative, reflecting a worsening in public finances short term as the COVID-19 outbreak "aggravates an already weak fiscal position." CEE SNAPSHOT AT MARKETS 1040 CET CURRENCI ES Latest Previous Daily Change bid close change in 2020 Czech 27.5300 27.4420 -0.32% -7.62% crown Hungary 354.7500 352.7200 -0.57% -6.65% forint Polish 4.5356 4.5192 -0.36% -6.16% zloty Romanian 4.8370 4.8387 +0.04% -1.01% leu Croatian 7.5600 7.5525 -0.10% -1.52% kuna Serbian 117.5200 117.5750 +0.05% +0.04% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 830.45 846.6800 -1.92% -25.56% Budapest 32181.34 32927.47 -2.27% -30.17% Warsaw 1611.10 1640.06 -1.77% -25.07% Bucharest 7747.39 7935.06 -2.37% -22.35% Ljubljana 789.37 793.71 -0.55% -14.74% Zagreb 1557.26 1569.42 -0.77% -22.81% Belgrade <.BELEX15 698.63 689.82 +1.28% -12.86% > Sofia 438.94 447.27 -1.86% -22.74% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.9190 0.1970 +159bps +19bps > 5-year <CZ5YT=RR 1.0080 0.0270 +165bps +3bps > 10-year <CZ10YT=R 1.2950 -0.0370 +176bps -2bps R> Poland 2-year <PL2YT=RR 0.6530 -0.0070 +132bps -2bps > 5-year <PL5YT=RR 1.0710 -0.0110 +171bps +0bps > 10-year <PL10YT=R 1.4520 -0.0010 +192bps +2bps R> FORWARD 3x6 6x9 9x12 3M interba nk Czech Rep < 0.30 0.29 0.30 0.97 PRIBOR=> Hungary < 1.15 1.11 1.06 1.08 BUBOR=> Poland < 0.32 0.32 0.32 0.70 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Additional reporting by Jason Hover in Prague and Alan Charlish in Warsaw; Editing by Kirsten Donovan)

CEE MARKETS-Forint keeps leading FX gains; zloty down after rate cut

09 Apr 2020

By Radu-Sorin Marinas and Krisztina Than BUCHAREST/BUDAPEST, April 9 The Hungarian forint hit a two-week high on Thursday, leading Central European currency gains, boosted by the central bank saying it could raise the 0.9% rate on its new one-week deposit tool if market conditions justified it. By 0950 GMT, the forint firmed 0.9% to as high as 354.0 to the euro, followed by the Czech crown with a 0.4% gain to 26.880, past the psychological level of 27 per euro as markets got a boost from hopes the coronavirus outbreak was nearing its peak. Hungarian central bank deputy governor Marton Nagy said on Wednesday the one-week deposit rate will be the strongest interest rate in the future, and widening the interest rate corridor had created the possibility to tighten policy if needed, and an ultra-accommodative policy stance "was over." "A wider interest rate corridor allows the central bank's flexibility in controlling the short end of the yield curve, which is key for the forint," said Bank of America analysts. The crown hit a three-week high amid stronger risk appetite. A Prague-based dealer said the break past the 27 per euro level was a shakier move in today's market environment than it had been in the past, when it could propel gains. "We can easily bounce back (to weaker levels)... There is still low liquidity," the dealer said. Czech bond yields ticked higher at the long end of the curve. Lower house legislators gave a green light to the Czech central bank to buy a wider selection of market assets if needed in the future. The bill still needs Senate approval. The bill has stoked some speculation on asset purchases. Central bank board member Tomas Holub told Reuters the bank was seeking the mandate primarily to have tools to provide liquidity and support financial stability. Considering quantitative easing would also be on the table if conventional tools are exhausted, he said, and the bank was still quite far from using any non-conventional tools as it had 100 basis-points of room to cut interest rates. Central banks in much of the region have been loosening policy to ease the impact from the virus outbreak. The Polish zloty was down 0.3% at 4.545 versus the euro after the central bank delivered a surprise 50 basis point reduction on Wednesday. CEE SNAPSHOT AT MARKETS 1140 CET CURRENCIES Latest Previous Daily Change bid close change in 2020 Czech 26.9400 27.0250 +0.32% -5.60% crown Hungary 354.6000 357.6000 +0.85% -6.61% forint Polish 4.5450 4.5313 -0.30% -6.35% zloty Romanian 4.8305 4.8345 +0.08% -0.87% leu Croatian 7.6140 7.6250 +0.14% -2.21% kuna Serbian 117.4700 117.6000 +0.11% +0.09% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 Prague 836.57 827.6600 +1.08% -25.01% Budapest 33265.20 32863.79 +1.22% -27.81% Warsaw 1585.88 1579.18 +0.42% -26.24% Buchares 8109.62 8000.10 +1.37% -18.72% t Ljubljan 804.28 782.48 +2.79% -13.13% a Zagreb 1595.20 1584.02 +0.71% -20.93% Belgrade <.BELEX15 686.22 685.18 +0.15% -14.40% > Sofia 439.91 435.55 +1.00% -22.57% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.0020 0.0550 +162bp +6bps > s 5-year <CZ5YT=RR 1.0750 -0.0930 +161bp -10bps > s <CZ10YT=R 1.5420 0.0870 +186bp +9bps 10-year R> s Poland 2-year <PL2YT=RR 0.7940 -0.0170 +141bp -1bps > s 5-year <PL5YT=RR 1.2190 -0.0050 +176bp -1bps > s <PL10YT=R 1.5570 -0.0040 +187bp +0bps 10-year R> s FORWARD 3x6 6x9 9x12 3M interba nk Czech < 0.36 0.37 0.47 1.00 Rep PRIBOR=> Hungary < 1.33 1.31 1.27 1.10 BUBOR=> Poland < 0.51 0.46 0.42 1.17 WIBOR=> Note: are for ask prices FRA quotes ************************************************** ************ (Additional reporting by Anita Komuves in Budapest, Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Kirsten Donovan)

UPDATE 1-CEE MARKETS-Romania's central bank halts leu slide, forint hits new low

19 Mar 2020

(Updates with Romanian leu, dealer comments, bonds) By Jason Hovet and Radu-Sorin Marinas PRAGUE/BUCHAREST, March 19 Romania's central bank jumped in to halt the leu's fall to new lows on Thursday, dealers said, and Hungary's forint also sank to a record low as a sell-off amid global coronavirus worries continued to hit central Europe hard. The Czech crown stabilised slightly but has lost around 8% already in March to lead the region down, as long-held positions unwind. The forint and the Polish zloty are both down more than 5%. The Romanian leu touched a new low of 4.87 to the euro on Wednesday, leading the central bank to step into the foreign exchange market on Thursday, according to dealers. "It's been there to cushion the slide," one said. The central bank declined to comment. The leu fell as low as 4.8610 to the euro early, before trading 0.2% up on the day at 4.845 by 1323 GMT. The forint was down 0.7% at 356.90 to the euro, off a new all-time low of 359.50. The zloty lost 0.4% to 4.556 and the crown regained 0.5% on the day to 27.620 per euro after weakening to nearly 28 on Wednesday. Stock markets also continued their wild ride, gaining up to 3% after sharp losses this week. Central Europe's open economies are set to be hit by the disruptions to business and daily life being felt around the world as governments seek to contain the spread of the new coronavirus that has infected more than 200,000 worldwide. In central Europe, borders were closed, restaurants and shops were mostly ordered to shut and major factories announced production halts across the region, including all the major car producers that are the lifeblood of the regions' economies. The Czech and Polish central banks have been delivered rate cuts and Hungary's on Thursday detailed more help to maintain banks' lending capacity. On bond markets, Poland's central bank bought back bonds worth 2.66 billion zloty ($630.35 million) as part of a new programme. The crown is at five-year lows, its sharp move lower in large part due to the unwinding of huge positions that had been built up in the currency when the central bank was pursuing a policy of intervention to keep it weak between 2013 and 2017, analysts and traders said. Dealers said liquidity was poor and spreads wide, leading to fiercer moves. "This is a stop-loss run," one dealer said. CEE SNAPSHO MARKETS T CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 27.6200 27.7565 +0.49% -7.92% = crown => EURHUF Hungary <EURHUF 356.900 354.420 -0.69% -7.22% = forint => 0 0 EURPLN Polish <EURPLN 4.5557 4.5378 -0.39% -6.57% = zloty => EURRON Romanian <EURRON 4.8450 4.8558 +0.22% -1.17% = leu => EURHRK Croatian <EURHRK 7.6110 7.6023 -0.11% -2.18% = kuna => EURRSD Serbian <EURRSD 117.580 117.580 +0.00% -0.01% = dinar => 0 0 Note: calcula 1800 daily ted CET change from Latest Previou Daily Change s close change in 2020 .PX Prague 715.05 690.370 +3.57% -35.91% 0 .BUX Budapest 29485.3 29464.2 +0.07% -36.02% 0 8 .WIG20 Warsaw <.WIG20 1436.47 1401.29 +2.51% -33.19% > .BETI Buchares 7270.39 7292.72 -0.31% -27.13% t .SBITO Ljubljan <.SBITO 704.46 724.81 -2.81% -23.91% P a P> .CRBEX Zagreb <.CRBEX 1369.76 1387.90 -1.31% -32.10% > .BELEX Belgrade <.BELEX 620.73 652.51 -4.87% -22.57% 15 15> .SOFIX Sofia <.SOFIX 416.84 416.39 +0.11% -26.63% > Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.5140 0.1170 +221bp +6bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.8150 0.2140 +227bp +18bps RR RR> s CZ10YT <CZ10YT 1.7350 0.0000 +195bp -2bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 1.4470 0.2710 +214bp +21bps RR RR> s PL5YT= 5-year <PL5YT= 1.7490 0.0120 +221bp -3bps RR RR> s PL10YT <PL10YT 2.2090 0.2270 +242bp +21bps =RR 10-year =RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.82 0.43 0.41 1.80 Rep ><PRIBO R=> Hungary <HUFFRA 0.61 0.63 0.63 0.61 ><BUBOR => Poland <PLNFRA 0.86 0.79 0.72 1.22 ><WIBOR => Note: FRA quotes are for ask prices ******************************************** ****************** (Reporting by Jason Hovet in Prague, Radu Marinas in Bucharest, Anita Komuves in Budapest and Alan Charlish in Warsaw; Editing by Alex Richardson, William Maclean)

Romanian lawmakers endorse PM Orban in vote of confidence

14 Mar 2020

BUCHAREST Romania's centrist Prime Minister Ludovic Orban won a parliamentary vote of confidence by a large margin as expected on Saturday, with all parties seeking to end a political stalemate and focus on reining in the spread of coronavirus.

Facing coronavirus spread, Romania's president makes new push to form government

13 Mar 2020

BUCHAREST Romanian President Klaus Iohannis called talks with political parties for Friday to try to get parliament to endorse a new prime minister next week so he can focus entirely on tackling the coronavirus outbreak.

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