CEE MARKETS-Forint leads FX losses, Polish cbank eyed

                                
 BUDAPEST, Aug 24 (Reuters) - East Europe's currencies eased
on Tuesday as global sentiment soured, with the forint leading
losses after Hungary's central bank warned on Monday that
inflation could pick up faster and the recovery be slower than
expected.
                                
 The bank kept its key base rate on hold at 5.25 percent as
expected on Monday but said the government's commitment to keep
the budget deficit within sustainable limits was key to
retaining investors' trust after a halt in talks with the
International Monetary Fund and the EU last month.
[ID:nLDE67M12T]
                                
 It also warned it may need to hike rates if the inflation
outlook or Hungary's risk assessment worsen, and Governor Andras
Simor said he was not aware of any plans to restart talks with
the IMF.
                                
 Poland's rate-setting Monetary Policy Council decides on
interest rates <PLINTR=ECI> on Tuesday, and analysts expect the
main rate to stay unchanged at an all-time low of 3.5 percent.
                                
 Poland's unemployment<PLUNM=ECI> rate fell to 11.4 percent
in July from 11.6 percent in June, while retail sales rose 3.9
percent year on year in July, below forecasts and down from 6.4
percent in June, data showed on Tuesday. [ID:nWSF009391]
                                
 "Even though more important macroeconomic data are to be
released today, while the MPC is to decide on interest rates,
these events will give priority to data from the base markets
(euro zone June industrial orders and U.S. existing home sales
for July)," Bank BPH said in a morning comment.
                                
 At 0725 GMT, the forint <EURHUF=> led regional losses and
was down by 0.7 percent, while the Polish zloty <EURPLN=> fell
0.2 percent on the day. The Czech crown <EURCZK=> and the
Romanian leu <EURRON=> were both 0.2 percent lower.
                                
 "We were seeing decent demand in EUR and USD vs the forint
yesterday and today," a Hungarian currency dealer said.
                                
 "A key level is at 283.80/284.00, and a daily close above
this would signal more weakness towards 288.00/290," he added.
                                
 "Yesterday's central bank comments on inflation and growth,
and also the USD strength ... were the main triggers."
                                
 Hungary will hold a 3-month discount Treasury bill auction
later on Tuesday <HUISSUE>.
                                
 The Romanian leu <EURRON=> edged down marginally in early
trade on Tuesday ahead of an extraordinary meeting of the
senate, which was expected to discuss an IMF-backed hike in
value-added tax (VAT).
                                
 Analysts said the centrist government, having a fragile
majority in parliament, might struggle to keep in place the 5
percentage point increase in VAT to 24 percent enforced in July.
                                
 On Monday, the budget and finance committee of the upper
house did not endorse the hike, while it approved a reduction to
5 percent in the tax levied on basic food.
                                
 The Czech crown fell back with other regional currencies as
investor appetite for risk stayed weak, and was unable to get a
boost from a more hawkish stance among policymakers.
                                
 "The prevailing mood on global markets is not bringing
anything good for riskier assets," CSOB analysts said. "The
crown could therefore move beyond 24.80 to the euro."
                                
 Czech central banker Eva Zamrazilova was quoted as saying by
newspaper Lidove Noviny on Tuesday that she wanted discussion of
a rise in interest rates very soon.
                                
 Czech borrowing costs are at a record low with the main
two-week repo rate at 0.75 percent, after a 25 basis point cut
in May.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  24.832   24.779   -0.21%   +5.98%
Polish zloty     <EURPLN=>   4.018    4.01    -0.2%    +2.14%
Hungarian forint <EURHUF=> 284.27   282.2     -0.73%   -4.9%
Croatian kuna    <EURHRK=>   7.273    7.275   +0.03%   +0.5%
Romanian leu     <EURRON=>   4.238    4.228   -0.24%   -0.01%
Serbian dinar    <EURRSD=> 104.9    104.92    +0.02%   -8.6%
All data taken from Reuters at 0925 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus; Writing by Krisztina Than;
Editing by Hugh Lawson)