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CEE MARKETS-Zloty firms after minor rise in central bank's CPI forecasts

* Polish central bank keeps rates on hold Zloty keeps gains after rise in CPI, GDP forecasts

(Recasts with Polish central bank decision and comments) BUDAPEST, Nov 8 (Reuters) - The zloty held onto its gains against the euro on Wednesday, outperforming Central European peers, after the Polish central bank revised its economic output and inflation forecasts mildly upwards. The bank kept is main interest rate on hold as expected. Governor Adam Glapinski reiterated at a news conference that interest rates should remain unchanged until the end of next year, and said a recent firming of the zloty meant monetary conditions had tightened. The zloty has gained more than 2 percent since late September, and has 4 percent this year, outperforming regional peers apart from the Czech crown. On Wednesday it firmed 0.2 percent by 1624 GMT, to 4.2365. "At this point, the inflation rate is not expected to overshoot the target, yet the inflationary pressure is likely to gradually build throughout 1H18 (the first half of 2018)," Erste analyst Katarzyna Rzentarzewska said in a note. She said she expected the bank's first rate hike to come in the last quarter of 2018, "yet the risks for monetary tightening to begin sooner have increased". The Czech central bank is the only one in Central Europe to have increased interest rates due to a rise in inflation in the past year. The bank delivered its second hike since August last week, but its less-hawkish-than-expected guidance has pushed back the crown from 4-year highs. On Wednesday it eased 0.1 percent against the euro, in tandem with the Hungarian forint. Expectations for interest rate rises have also helped bank stocks listed in Warsaw. Their index and the bourse's bluechip index steadied, after hitting multi-year highs on Tuesday. The index <.WIG2)> fell almost one percent. It was knocked mainly by a more than 5 percent plunge in the shares of Poland's biggest power producer PGE after Chief Financial Officer Emil Wojtowicz said it was too early to resume paying dividends.

CEE MARKETS SNAPSH AT 1724 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 25.592 25.561 -0.12% 5.53% 0 0 Hungary 311.94 311.58 -0.12% -1.00% forint 00 00 Polish zloty 4.2365 4.2457 +0.22 3.95%

%

Romanian leu 4.6304 4.6316 +0.03 -2.06%

%

Croatian 7.5400 7.5410 +0.01 0.20% kuna % Serbian 118.85 118.76 -0.08% 3.79% dinar 00 00 Note: daily calculated previo close 1800 change from us at CET

STOCKS

Latest Previo Daily Change

us

close change in

2017

Prague 1054.0 1055.7 -0.16% +14.3 7 3 7% Budapest 40122. 39809. +0.79 +25.3 07 00 % 7% Warsaw 2513.3 2536.3 -0.91% +29.0 4 7 3% Bucharest 7777.2 7747.6 +0.38 +9.77 7 9 % % Ljubljana 792.07 784.85 +0.92 +10.3 % 8% Zagreb 1839.3 1816.5 +1.26 -7.79% 9 7 % Belgrade 730.57 729.68 +0.12 +1.84 % % Sofia 672.49 674.34 -0.27% +14.6

8% BONDS

Yield Yield Spread Daily (bid) change vs change Bund in Czech spread

Republic

2-year 0.321 0.023 +108b +2bps

ps

5-year 0.738 0.037 +112b +4bps

ps

10-year 1.591 -0.007 +127b -1bps

ps Poland

2-year 1.605 -0.014 +237b -2bps

ps

5-year 2.629 -0.008 +301b -1bps

ps

10-year 3.399 -0.015 +307b -1bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.91 1.04 1.17 0

IBOR=>

Hungary <BU 0.03 0.08 0.115 0.03

BOR=>

Poland <WI 1.763 1.801 1.894 1.73

BOR=>

Note: FRA are for ask quotes prices ******************************************************** *****

(Reporting by Sandor Peto; Editing by Raissa Kasolowsky)