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CEE MARKETS-Zloty inches up, UK market break keeps trading thin

0830 GMT, the Polish zloty had firmed 0.17% to 4.3694

BUCHAREST, Aug 26 (Reuters) - Central European currencies edged up in slim volumes on Monday, as many investors stayed on the sidelines due to a public holiday in Britain, with the Polish zloty propped up by plans for a balanced budget in the biggest ex-communist European Union country. Quoting sources close to the Polish administration, the daily Rzeczpospolita said the government planned to move its budget out of deficit in 2020 for the first time in 30 years. Poland enjoys a low deficit mainly due to high economic growth. The government says the budget is in good shape because of its tightening grip over tax avoidance. against the euro, followed by the Hungarian forint with a 0.06% gain. The Romanian leu and the Czech crown were flat at 4.7250 and 25.8470 to the euro respectively. "Sino-American trade war fears caused jitters on Friday but that is unlikely to affect Monday trading in Hungary," a Budapest-based dealer said. "We are 2-3 basis points lower across the yield curve, and the forint is a touch stronger against the euro, but in the absence of London this is hardly an indication." Regional stocks extended losses, falling about 0.8% on the day, as global trade jitters kept markets on the backfoot. The National Bank of Hungary is widely expected to leave its main rate and its overnight deposit rate unchanged at its Aug. 27 meeting, according to a Reuters poll. A decline in local inflation and a dovish turn by global central banks may enable it to put off its next rate increase until after 2020. Similarly, the Czechs eye stable rates. Central bank vice-governor Tomas Nidetzky said in an interview with the business daily Hospodarske Noviny that he saw stable rates through 2020 and expected the crown to trend weaker than central bank forecasts. "His outlook is quite similar to ours," Ceska Sporitelna analyst Jiri Polansky said in a note. He said the bank's next outlook would take the chance of a rate hike off the cards next year given the global backdrop of weakening growth. The Czechs have shifted into neutral on rates since May after lifting the base rate eight times since 2017 as they seek to hold down price pressures from fast-rising wages and household spending.

CEE SNAPSHOT AT 1058MARKETS CET

CURRENCIES

Latest Previous Daily Changebid close change in 2019Czech 25.8460 25.8500 +0.02% -0.54%

crown

Hungary 328.9500 329.3500 +0.12% -2.39%

forint

Polish 4.3694 4.3770 +0.17% -1.83%

zloty

Romanian 4.7250 4.7209 -0.09% -1.50%

leu

Croatian 7.3897 7.3885 -0.02% +0.27%

kuna

Serbian 117.7400 117.9800 +0.20% +0.48%

dinar

Note: calculated from 1800daily CET

change

Latest Previous Daily Changeclose change in 2019Prague 1036.58 1045.5500 -0.86% +5.07%Budapest 39219.08 39519.58 -0.76% +0.20%Warsaw 2086.12 2103.68 -0.83% -8.37%Bucharest 9027.01 9095.00 -0.75% +22.26%Ljubljana 860.45 861.54 -0.13% +6.99%Zagreb 1870.35 1874.25 -0.21% +6.95%Belgrade <.BELEX15 749.09 751.13 -0.27% -1.65%>Sofia 575.65 576.43 -0.14% -3.16%

BONDS

Yield Yield Spread Daily(bid) change vs Bund change inCzech spread

Republic

2-year <CZ2YT=RR 1.0810 -0.0040 +196bp +0bps> s5-year <CZ5YT=RR 0.8770 0.0210 +178bp +1bps> s10-year <CZ10YT=R 1.0940 0.0030 +176bp +0bpsR> s

Poland

2-year <PL2YT=RR 1.5540 -0.0270 +244bp -2bps> s5-year <PL5YT=RR 1.6880 -0.0620 +259bp -8bps> s10-year <PL10YT=R 1.9690 -0.0380 +264bp -4bpsR sFORWARD RATE AGREEMENT3x6 6x9 9x12 3M

interbank

Czech Rep < 2.09 1.89 1.72 2.14

PRIBOR=>

Hungary < 0.33 0.39 0.43 0.27

BUBOR=>

Poland < 1.74 1.73 1.69 1.72

WIBOR=> Note: FRA are for ask prices quotes

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(Additional reporting by Marcin Goclowski in Warsaw, Marton Dunai in Budapest and Jason Hovet in Prague; Editing by Dale Hudson)