CEE MARKETS 1-HUF eases before rate decision, other FX firm

                                
 WARSAW, Aug 23 (Reuters) - Hungary's forint opened slightly
weaker on Monday ahead of the central bank's monthly interest
rate decision while other currencies were a touch stronger,
helped by a rising euro, the region's main reference currency.
                                
 All analysts polled by Reuters expect Hungary's central bank
to keep its base rate <NBH1> on hold this month following a
10-month period of easing. Almost half of them see rates
remaining flat for the rest of the year.
                                
 "The rate decision in Hungary is likely to be a non-event.
Nobody expects a rate step as market uncertainty continues,"
analysts at Commerzbank wrote in a note.
                                
 "But it is likely to be interesting whether central bank
comments suggest that it continues to defy all attempts on the
part of politicians to interfere," it said, alluding to ongoing
tensions between the Budapest government and the central bank.
                                
 The decision will be announced at 1200 GMT followed by a
news conference at 1300 GMT, where the bank will also present
the main forecasts from its new inflation report.
                                
 Last month's central bank meeting followed the surprise
suspension of a review of Hungary's loan programme by the
International Monetary Fund and the European Union which led to
a plunge in the forint <EURHUF=> to 16-month lows against the
euro, and prompted rating agencies to warn against a potential
rating downgrade.
                                
 But a global rise in risk appetite has helped Hungary's
currency to trim some of its previous losses.
                                
 By 0731 GMT the forint <EURHUF=> was 0.1 percent weaker,
trading at 279.3 against the euro. 
                                
 Other currencies were a touch stronger, with the Polish
zloty <EURPLN=> and Romania's leu <EURRON=> each 0.2 percent up
against the euro, while the Czech crown <EURCZK=> was 0.1
percent stronger.
                                
 "The euro is slightly stronger, that's why the zloty is up,
but the move is really insignificant," said one Warsaw-based
dealer.
                                
 The Polish central bank's Monetary Policy Council (MPC) is
also expected to keep interest rates unchanged on Tuesday at an
all-time low for the 14th consecutive month.
                                
 Analysts see Polish borrowing costs rising by a moderate 25
basis points by the end of the year as the economy recovers from
its recent slowdown and inflationary pressures start to build.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  24.791   24.826  +0.14%   +6.16%
Polish zloty     <EURPLN=>   3.968    3.977  +0.23%   +3.43%
Hungarian forint <EURHUF=> 279.3    279.03   -0.1%    -3.2%
Croatian kuna    <EURHRK=>   7.269    7.28   +0.15%   +0.55%
Romanian leu     <EURRON=>   4.218    4.225  +0.17%   +0.46%
Serbian dinar    <EURRSD=> 104.76   104.627  -0.13%   -8.48%
 All data taken from Reuters at 0931 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
 
                                
 
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 (Reporting by Reuters bureaus, writing by Dagmara
Leszkowicz, editing by Stephen Nisbet)