CEE MARKETS-Currencies, stocks ease; Poland keeps monetary policy loose

* Rouble, lira woes moderately weigh on forint, zloty

* Polish central bank head says rates may stay low for years

* Polish long-term yields lowest since autumn 2016

* Czech government raises economic growth forecasts

(Recasts with Polish central bank decision and comments) BUDAPEST, April 11 (Reuters) - Central European stocks and currencies fell on Wednesday along with other emerging markets as geopolitical tensions rose. The region's main equity indexes dropped by 0.1 to 0.2 percent, except for a quarter percent rise in Budapest. In currency markets, the Polish zloty and Hungarian forint both eased by 0.1 percent against the euro by 1523 GMT, and the leu eased 0.15 percent. The Polish central bank kept interest rates on hold as expected, and Governor Adam Glapinski said he saw no reason to change record low interest rates in the next two years. The zloty briefly gained after he said the currency's strengthening had not caused problems in the economy. But it gave up ground as Glapinski said there were no reasons to think about policy tightening, and that a moment may come when action in the opposite direction would be advisable. "We believe that, given recent development of inflation rate, a rate hike is less and less likely to happen in 2019," Erste Group analyst Katarzyna Rzentarzewska said in a note. "We decided to change our baseline scenario to no policy rate hike next year as well." After a surprise decline in Polish annual inflation to 1.3 percent in March, the central bank said inflation would stay close to its target in the next few years. Polish 5- and 10-year government bonds were bid at their lowest yields since autumn 2016. The 10-year yield dipped below 3 percent, to 2.97 percent. Hungary's 10-year government bond yield dropped by 3 basis points to 2.38 percent. It has declined by almost 20 basis points since Prime Minister Viktor Orban's Fidesz party won elections on Sunday, ensuring policy predictability. "Thursday's auctions could be smoothly sold despite the lower yields levels," one trader said. The Czech crown traded steady, bucking the weakening of its regional peers. The Czech central bank is expected to continue to raise interest rates. The Czech Finance Ministry raised its growth forecasts for this year and next on Wednesday.



Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.3150 25.3130 -0.01% +0.90% crown > Hungary <EURHUF= 311.4400 311.1300 -0.10% -0.17% forint > Polish <EURPLN= 4.1900 4.1868 -0.08% -0.33% zloty > Romanian <EURRON= 4.6635 4.6565 -0.15% +0.35% leu > Croatian <EURHRK= 7.4250 7.4275 +0.03% +0.07% kuna > Serbian <EURRSD= 118.2000 118.2200 +0.02% +0.25% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1124.03 1125.020 -0.09% +4.25%


Budapest 37971.57 37882.42 +0.24% -3.57% Warsaw 2271.93 2274.81 -0.13% -7.69% Bucharest 8828.34 8841.74 -0.15% +13.86% Ljubljana <.SBITOP 829.29 829.92 -0.08% +2.84% > Zagreb 1805.03 1811.97 -0.38% -2.05% Belgrade <.BELEX1 737.79 737.07 +0.10% -2.90%


Sofia 660.64 664.75 -0.62% -2.48%


Yield Yield Spread Daily (bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 0.8130 -0.0070 +138bps +0bps


5-year <CZ5YT=R 1.2030 0.0000 +129bps +1bps


10-year <CZ10YT= 1.7760 -0.0120 +128bps +1bps

RR> Poland

2-year <PL2YT=R 1.5110 -0.0110 +207bps -1bps


5-year <PL5YT=R 2.2420 -0.0400 +233bps -3bps


10-year <PL10YT= 2.9810 -0.0570 +249bps -4bps




3x6 6x9 9x12 3M

interban k

Czech Rep 0.95 1.06 1.19 0.90



Hungary 0.07 0.10 0.18 0.03 Poland 1.73 1.73 1.76 1.70

Note: FRA are for ask prices quotes



(Reporting by Sandor Peto, editing by Larry King)