UPDATE 1-CEE MARKETS-Leu recovers, forint flat before central bank meets

* Leu gains as ROBOR rates surge

* Forint sets seventh-month high vs zloty

* Hungarian central bank may signal cut in its FX swaps

* Oil fall, Swiss franc mortgages plan knock down Warsaw shares

(Adds failure of Romanian bond auction, new analyst comments, fall of Romanian and Polish stocks) BUDAPEST/WARSAW, Jan 28 (Reuters) - The leu bucked a weakening of Central European currencies on Monday, rising from record lows as interbank interest rates jumped. Bucharest's overnight interbank interest rate started the new reserve period of banks at bids at 3.24 percent on Friday, jumping from 1.52 percent after Thursday's holiday in Romania, and stayed almost steady at 3.21 percent on Monday. Those "abnormally high" levels give some respite to the leu , ING analysts said in a note. The government rejected all bids at an auction of 2031-expiry bonds as government bond yields continued to edge up after rising more than 10 basis points on Friday. The 10-year bond traded around 5.17 percent, just below its highest level since July, when Romania's annual inflation rates were above 5 percent. It fell to 3.3 percent in December. But Romanian asset prices came under pressure from taxes on banks and energy firms. That raised concern over the business environment and, by linking the bank tax to interbank interest rate, confusion over monetary policy. The leu traded steady at 4.7675 versus the euro at 1425 GMT, The Czech crown shed 0.2 percent and the zloty eased 0.1 percent. In periods when Romania's short-term interbank rates are lower, the central bank can keep the leu between 4.75 and 4.8 to the euro with market interventions if the market environment does not deteriorate, the Erste analysts said. Elsewhere, the forint was also steady versus the euro and reached its highest level in almost seven months against the zloty a day before the Hungarian central bank's meeting. The bank is expected to keep interest rates on hold at its meeting on Tuesday, but some analysts expect it to signal a tightening in the liquidity it provides through its fx swaps.

In equities markets, Romanian stocks remained under pressure, with Bucharest's main index falling 0.8 percent. Warsaw stocks shed even more, tumbling 1.8 percent. A fall in oil prices dragged down Polish oil group PKN Orlen , which shed 3.4 percent - are under pressure from government plans to help those holding Swiss franc mortgages, said Marcin Materna, head of research at DM Millennium.

CEE SNAPSHOT AT MARKETS 1525 CET

CURRENCI ES

Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.7470 25.6890 -0.23% -0.16% crown > Hungary <EURHUF= 317.5500 317.5000 -0.02% +1.11% forint > Polish <EURPLN= 4.2930 4.2870 -0.14% -0.08% zloty > Romanian <EURRON= 4.7675 4.7669 -0.01% -2.38% leu > Croatian <EURHRK= 7.4260 7.4290 +0.04% -0.22% kuna > Serbian <EURRSD= 118.5000 118.4650 -0.03% -0.17% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2019 Prague 1020.28 1023.100 -0.28% +3.42%

0

Budapest 41265.13 40944.82 +0.78% +5.43% Warsaw 2357.19 2398.74 -1.73% +3.54% Bucharest 6991.20 7053.67 -0.89% -5.32% Ljubljana <.SBITOP 834.53 833.51 +0.12% +3.76% > Zagreb 1762.90 1762.22 +0.04% +0.81% Belgrade <.BELEX1 699.20 699.70 -0.07% -8.20%

5>

Sofia 574.81 573.33 +0.26% -3.31%

BONDS

Yield Yield Spread Daily (bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 1.7350 -0.0020 +232bps +0bps

R>

5-year <CZ5YT=R 1.6930 0.0100 +201bps +0bps

R>

10-year <CZ10YT= 1.8640 0.0300 +165bps +2bps

RR> Poland

2-year <PL2YT=R 1.3870 0.0050 +197bps +1bps

R>

5-year <PL5YT=R 2.1990 -0.0090 +252bps -2bps

R>

10-year <PL10YT= 2.8040 -0.0100 +259bps -2bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 2.07 2.11 2.12 2.00

<PRIBOR=

>

Hungary 0.29 0.51 0.75 0.15 Poland 1.72 1.73 1.73 1.72

Note: FRA are for ask prices quotes

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(Additional reporting by Radu Marinas in Bucharest, editing by Ed Osmond)