CEE MARKETS 3-Serbia's dinar rises after rate hike

(Adds detail on Serbia, region, updated prices)

* Serbia's c.bank raises benchmark rate 25 bps to 10.75 pct

* Euro zone keeps pressure on CEE currencies, stocks

* Uncertainty over Hungary's IMF talks, but auction strong

By Krisztina Than and Sam Cage

BUDAPEST/BUCHAREST, Oct 9 (Reuters) - Emerging European currencies and stocks were a touch lower on Tuesday after the IMF cut forecasts for global economic growth, but Serbia's dinar bucked the trend after an interest rate hike.

The IMF said the global economic slowdown was worsening and expects growth in central and eastern Europe to more than halve to 2.0 percent this year, and rise to only 2.6 percent in 2013.

Its warning about the growth outlook and concerns over Spanish and Greek debt knocked shares and the euro, also pulling down closely-linked assets in central Europe.

Cash-strapped Serbia is under pressure to bring down its debt to reassure investors and repair damaged relations with the International Monetary Fund, as the economy is shrinking on the back of falling demand from its biggest trade partner, the euro zone.

The central bank increased its benchmark interest rate

by 25 basis points to 10.75 percent, surprising some in the market who had expected rates to stay on hold, and the dinar

rose 0.1 percent to 114.57 per euro by 1317 GMT.

Of 10 analysts and traders polled by Reuters, five had expected the rate to remain on hold, three saw an increase of 25 basis points and two a 50 basis point rise.

"The (rate) rise was minimal," said a dealer with a Belgrade-based commercial bank. "It firmed the dinar a bit, but nothing dramatic."

Neighbouring Hungary, where markets are pricing in further monetary easing to help the recession-hit economy after two rate cuts in the past two months, sold 60 billion forints ($275 million) worth of three-month bills at an auction, which received strong bids.

Hungary's government launched a media campaign on Tuesday saying it would not " g ive in to the IMF" , j ust weeks before Budapest hopes to resume talks with lenders on a financial safety net to bolster its shrinking economy.

A fixed income trader said that remarks by Prime Minister Viktor Orban that Hungary could make do without an IMF deal even in 2013, had no market impact.

"The session is relatively quiet, liquidity is low but buyers have been in a majority over the past days, especially around the middle of the (yield) curve," the trader said.


Uncertainty over IMF talks, as well as euro zone concerns have weighed on the forint

this week, with the unit bid 0.1 percent lower while the Polish zloty was down 0.2 percent.

Polish yields were broadly flat, with five-year yields close to all-time lows hit at the beginning of October.

"There will be rate cuts so yields must fall," said Pawel Bialczynski, a fixed income dealer at BRE Bank. "We are before a cycle of cuts and it is natural that short- and medium-term yields are so low."

But dealers said that developments on the euro zone's debt crisis were the main driver of sentiment across the region. Central European stocks were also broadly lower, led by a 0.4 percent fall on the Bucharest bourse

. The Czech crown slipped 0.2 percent and Romania's leu was flat.

"The euro zone ministerial meeting has not brought anything new and Europe is in a vicious circle of negotiations," said Roman Fol, an FX dealer at Raiffeisenbank.

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

Currency Latest Previous Local Local close currency currency change change today in 2012 Czech crown

24.971 24.929 -0.17% +2.3%

Polish zloty

4.074 4.066 -0.2% +9.59%

Hungarian forint

283.34 283.2 -0.05% +11.03%

Croatian kuna

7.485 7.459 -0.35% +0.41%

Romanian leu

4.569 4.567 -0.04% -5.43%

Serbian dinar

114.57 114.71 +0.12% -6.65%

Yield Spreads Czech treasury bonds 2-yr T-bond CZ2YT=RR +3 basis points to 47bps over bmk* 7-yr T-bond CZ6YT=RR -1 basis points to +75bps over bmk* 10-yr T-bond CZ10YT=RR -4 basis points to +86bps over bmk* Polish treasury bonds 2-yr T-bond PL2YT=RR -2 basis points to +395bps over bmk* 5-yr T-bond PL5YT=RR -1 basis points to +362bps over bmk* 10-yr T-bond PL10YT=RR -2 basis points to +315bps over bmk* Hungarian treasury bonds 3-yr T-bond HU3YT=RR -1 basis points to +640bps over bmk* 5-yr T-bond HU5YT=RR +1 basis points to +612bps over bmk*

10-yr T-bond HU10YT=RR +2 basis points to +569bps over bmk*

*Benchmark is German bond equivalent.

All data taken from Reuters at 1517 CET.

Currency percent change calculated from the daily domestic

close at 1600 GMT.

((sam.cage@thomsonreuters.com)(+40)(0)(21 305 5266)(Reuters Messaging: sam.cage.thomsonreuters.com@reuters.net))