CEE MARKETS 1-Forint extends losses before rate decision

                                
 WARSAW, April 18 (Reuters) - Hungary's forint weakened
against the euro on Monday, extending recent losses ahead of a
rate decision that will likely keep borrowing costs unchanged
amid growing inflation pressure across the region.
                                
 Currencies have so far shrugged off negative news coming
from the heavily indebted euro zone periphery nations, but
market participants say a possible restructuring of Greece's
debt would affect the CEE region.
                                
 A jump in Hungary's inflation to 4.5 percent year-on-year in
March has reinforced expectations the central bank will keep its
base interest rate <NBHI> unchanged at 6 percent.
                                
 The bank's decision will be published at 1200 GMT, followed
an hour later by a news conference with governor Andras Simor.
                                
 "We do not expect any changes to the rate but it will be
quite interesting to see how the MPC reacts to the recent jump
in the CPI (and core)," BNP Paribas said in a note.
                                
 By 0752 GMT the forint <EURHUF=> traded at 266.82, down some
0.3 percent versus the euro.
                                
 The Polish zloty <EURPLN=> edged down 0.1 percent as the
market awaited crucial data on March wages due at 1200 GMT,
which should signal whether recent rises in consumer prices have
started to translate into wage increases.
                                
 "If last month's wages rose more slowly than expected by
analysts, the zloty could fall towards 3.97 against the euro, as
this scenario would decrease the chances for swift monetary
policy tightening," Bank BPH analysts wrote in their research.
                                
 Analysts have started to bet on a rate increase next month
as inflation in March accelerated to 4.3 percent, well above the
central bank's target of 2.5 percent +/- 1 percentage point.
                                
 But governor Marek Belka cooled down those expectations,
saying the MPC should not base its decision on monthly data.
                                
 MPC member Adam Glapinski echoed this view in an interview
for Bloomberg on Monday, saying the bank would make a serious
mistake by raising borrowing costs in May. [ID:nWSF010227]
                                
 Elsewhere, both Romania's leu <EURRON=> and the Czech crown
<EURCZK=> were about 0.1 percent stronger versus the euro.
                                
 Government leaders in the Czech Republic meet on Monday to
debate the future of the centre-right government after a
corruption scandal brought it to the brink of collapse. Parties
pledged on Friday to keep their alliance but did not come up
with any specific plan.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2011 
Czech crown      <EURCZK=>  24.215   24.24    +0.1%    +3.24%
Polish zloty     <EURPLN=>   3.953    3.949   -0.1%    +0.13%
Hungarian forint <EURHUF=> 266.82   266.5     -0.12%   +4.18%
Croatian kuna    <EURHRK=>   7.352    7.329   -0.31%   +0.38%
Romanian leu     <EURRON=>   4.086    4.09    +0.1%    +3.6%
Serbian dinar    <EURRSD=> 101.33   101.33       0%    +4.54%
All data taken from Reuters at 0952 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 Toby Chopra)