CEE MARKETS 1-Currencies stable, Serbia rate decision eyed

BUDAPEST, Oct 9 (Reuters) - Emerging European currencies were mostly flat on Tuesday with markets digesting weaker global growth forecasts from the IMF and Czech inflation data which met expectations.

The Serbian dinar

was 0.1 percent firmer ahead of a rate decision by its central bank, with analysts split over whether the bank would raise its benchmark interest rate

to counter rising inflation.

Of 10 analysts and traders polled by Reuters five said the bank would hold the rate at 10.5 percent, three analysts saw an increase of 25 basis points and two a 50 basis point rise to 11 percent. Last month the bank kept the main rate on hold.

"We expect today's rate decision in Serbia to end at most in a 25bp rate hike to 10.75 percent, though we would not be surprised to see the NBS leave its policy rate on hold," Unicredit said in a note.

"Our estimate ...is mainly driven by our belief in NBS's strict commitment to guaranteeing currency stability at this stage, as well as making some efforts to bolster its damaged inflation targeting credibility."

The IMF said in its bi-annual report that the global economic slowdown was worsening as it cut its growth forecasts for the second time since April. It expected growth in the Europe's emerging eastern markets would roughly halve to 2.6 percent.

Dealers said that developments on the euro zone's debt crisis were the main driver of sentiment across the region. Ministers meeting in Luxembourg have dampened any hopes on markets of a swift move by Spain to seek more international aid.

"The euro zone ministerial meeting has not brought anything new and Europe is in a vicious circle of negotiations," he said.

The Czech crown

was flat after September inflation data which were fully in line with forecasts, showing annual inflation at 3.4 percent.

Roman Fol, an FX dealer at Raiffeisenbank, said he expected the crown would move within a range of 24.85 and 25.00 per euro in quiet trade on Tuesday.

The forint

was bid 0.2 percent lower versus the euro at 283.78 at 0710 GMT. Poland's zloty

was flat, with markets weighing the prospect of rate cuts after a central banker said he may vote for an interest rate cut next month.

"A consolidation of the zloty in the 4.04-4.08 range remains the most likely scenario," Unicredit's Bank Pekao said.

"Short-term bonds are relatively stable despite a series of comments from policymakers that do not alter our forecast that rates will be cut at the November meeting," Pekao added. "The longer-end on the yield curve may positively react to the falling yield of Bunds."

--------------------------MARKET SNAPSHOT--------------------

Currency Latest Previous Local Local close currency currency change change today in 2012 Czech crown 24.927 24.929 +0.01% +2.48% Polish zloty 4.068 4.066 -0.05% +9.75% Hungarian forint 283.78 283.2 -0.2% +10.86% Croatian kuna 7.482 7.459 -0.31% +0.45% Romanian leu 4.567 4.567 0% -5.39% Serbian dinar 114.61 114.71 +0.09% -6.68%

All data taken from Reuters at 0910 CET.

Currency percent change calculated from the daily domestic

close at 1600 GMT.

(Reporting by Krisztina Than; editing by Patrick Graham)

((krisztina.than@thomsonreuters.com)(+36 1 327 4745)(Reuters Messaging: krisztina.than.thomsonreuters.com@reuters.net))