CEE MARKETS-Forint softens ahead of interest rate decision

By Alan Charlish and Anita Komuves WARSAW/BUDAPEST, Dec 20 (Reuters) - The Hungarian forint weakened on Tuesday in thin trade ahead of a central bank meeting that is likely to result in interest rates being kept on hold despite soaring inflation. The National Bank of Hungary (NBH) is expected to leave its base rate unchanged at 13%, the highest in the European Union, while inflation is projected at 18.7% next year, more than four percentage points above 2022 levels. The bank is due to publish its decision at 1300 GMT. The forint was 0.63% softer at 405.15 against the euro by 0902 GMT. "There is very little trade now, before the holidays ... the bigger swings are the result of low liquidity, there is no news behind this," said an FX trader in Budapest. After the interest rate decision the central bank will announce its latest inflation projections. "The forint's rate could be moved primarily by hints about steps to be expected in the next few months," brokerage Equilor wrote. Long-term government bond yields were 5-6 basis points higher on Tuesday, tracking core market yields, said one fixed-income trader in Budapest. The yield on the benchmark 10-year bond was about 8.45%. The Czech crown was 0.07% weaker at 24.25 to the euro as traders looked ahead to the Czech national bank's (CNB) rate meeting on Wednesday. The CNB is likely to hold interest rates steady at its final policy meeting of 2022 and will not begin cutting rates until the second half of 2023, a Reuters poll showed Elsewhere, the Polish zloty was 0.11% firmer against the euro at 4.6855, unmoved by data that showed November industrial output faring better than expected by analysts. "The EUR/PLN exchange rate remains within a narrow fluctuation band and we do not believe that publications on industrial production or the situation on the labour market could change this ... because the data will not affect the outlook for monetary policy," Bank Millennium analysts wrote before the data was published. CEE SNAPSH AT MARKET OT 1002 S CET CURREN CIES Latest Previo Daily Change us bid close change in 2022 EURCZK Czech 0 0 % EURHUF Hungary 00 00 EURPLN Polish % EURRON Romania % EURHRK Croatia EURRSD Serbian 00 50 % % Note: calculated 1800 daily from CET change Latest Previo Daily Change us close change in 2022 .PX Prague 1170.2 1172.0 +0.00 7 800 % .BUX Budapes 44915. 45270. -0.78% -11.45 t 56 04 % .WIG20 Warsaw <.WIG2 1738.3 1743.2 -0.28% -23.32 0> 0 4 % .BETI Buchare <.BETI 12094. 12100. -0.05% -7.40% st > 84 72 .SBITO Ljublja <.SBIT 1052.9 1062.1 -0.86% -16.13 P na OP> 9 7 % .CRBEX Zagreb <.CRBE 1937.5 1936.8 +0.03 -6.82% X> 3 6 % .BELEX Belgrad <.BELE 808.95 810.14 -0.15% -1.44% 15 e X15> .SOFIX Sofia <.SOFI 596.88 597.75 -0.15% -6.10% X> Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republi c CZ2YT= 0 ps CZ5YT= 0 ps CZ10YT ps Poland PL2YT= 0 ps PL5YT= ps PL10YT ps FORWAR D 3x6 6x9 9x12 3M interb ank Czech Hungary Poland Note: are for ask FRA prices quotes *************************************** *********************** (Reporting by Alan Charlish in Warsaw, Anita Komuves in Budapest and Jason Hovet in Prague Editing by David Goodman )