CEE MARKETS 2-Forint down on cbank, zloty supported

                                
 * Hungarian forint falls after Monday rate meeting
                                
 * Zloty supported by rate hike expectations, selloff inflows
                                
 * Investors eyeing Romanian cbank rate meeting on March 31
                                
 
                                
 (Adds bonds, updates prices)
                                
 By Luiza Ilie
                                
 BUCHAREST, March 29 (Reuters) - The Hungarian forint fell to
a five-day low versus the euro on Tuesday after the central bank
held rates the previous day, while the Polish zloty gained
modestly, anticipating rate hikes and privatisation inflows.
                                
 Hungary's central bank left interest rates at 6 percent as
expected in a unanimous vote attended by three new policymakers
on Monday <NBHI>, and flagged rates would stay on hold for a
sustained period to meet its inflation target. [ID:nLDE72R0H3] 
                                
 Meanwhile, Poland's central bank is expected to hike
borrowing costs at its meeting next week after a board member
was quoted as saying that a change in rates in April was "very
probable". [ID:nLDE72R09T]
                                
 Analysts polled by Reuters earlier this month expected the
central bank to raise rates by a quarter of a percentage point
from the current 3.75 percent, although data releases have since
sent conflicting signals.
                                
 The Polish zloty could also find support from investment
flows related to planned government asset sales, traders said.
                                
 Polish Treasury Minister Aleksander Grad said on Tuesday
Poland will sell at least 10 percent of the country's top bank
PKO BP <PKOB.WA> in a secondary public offering scheduled for
the second half of September. [ID:nLDE72S0OJ] [ID:nLDE71L1QI]
                                
 "The treasury minister has shaken the market today, and it
looks like privatisation inflows are likely to be one of the key
drivers for the market in the coming months," said Karol
Zaluski, chief FX dealer at ING bank in Warsaw.
                                
 By 0930 GMT, the forint <EURHUF=> was down 0.8 percent on
the day against the euro. The zloty <EURPLN=> was a touch
stronger, as was the Czech crown <EURCZK=>.
                                
 Also in Hungary, data showed the three-month rolling
unemployment rate rose to 11.5 percent in December-February,
from 11.2 percent in November-January. [ID:nBUD005770]
                                
 "I think it is a correction, profit taking," said one trader
in Budapest. "The ECB is expected to hike interest rates, same
for Poland, the Czech Republic. You cannot expect the forint to
get stronger forever."
                                
 Elsewhere in the region, the Romanian leu <EURRON=> was down
half a percentage point against the single currency as profit
taking continued after the unit hit a one-year high last week
supported by central bank comments. [ID:nLDE72L18A]
                                
 Markets are looking forward to a rate-setting meeting on
Thursday and widely expect the bank to keep borrowing costs
unchanged at 6.25 percent.
                                
 Stubborn inflation has prompted analysts to revise their
earlier expectations of rate cuts later this year, and most now
expect the central bank to keep rates frozen in 2011.
                                
 Traders said the region could see some risk aversion, driven
by mounting worries about Japan's crippled Fukushima nuclear
plant and uncertainty over the impact of fighting in oil
producer Libya.
                                
 Stocks in the region were weaker on the day, led by Warsaw
<.WIG>.
 --------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2011 
Czech crown      <EURCZK=>   24.529    24.537  +0.03%   +1.92%
Polish zloty     <EURPLN=>   3.991     3.993   +0.05%   -0.83%
Hungarian forint <EURHUF=>   267.75    265.3   -0.92%   +3.82%
Croatian kuna    <EURHRK=>   7.384     7.364   -0.27%   -0.05%
Romanian leu     <EURRON=>   4.127     4.101   -0.63%   +2.57%
Serbian dinar    <EURRSD=>   103.19    103.453 +0.25%   +2.65%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +2 basis points to  1bps over bmk*
7-yr T-bond   CZ7YT=RR    0 basis points to  +64bps over bmk*
10-yr T-bond   CZ9YT=RR    -1 basis points to  +67bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -1 basis points to  +324bps over bmk*
5-yr T-bond   PL5YT=RR    -2 basis points to  +318bps over bmk*
10-yr T-bond PL10YT=RR    0 basis points to  +301bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1150 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus; Writing by Luiza Ilie; Editing
by Catherine Evans)