CEE MARKETS-Zloty calm before Polish election, crown off 15-month low

WARSAW, Oct 13 (Reuters) - The Polish zloty held steady on Friday ahead of a close parliamentary election that has caused nervousness among some investors, while the Czech crown held off a nearly 15-month low. Poles will cast their votes on Sunday in an election that could set a course on issues including government spending, social policy, as well as rule of law disputes which have been holding up European Union funds. The ruling Law and Justice party (PiS), which has clashed with the EU's executive, held a narrow lead in recent opinion polls, but short of an absolute majority. The zloty was slightly off a high hit on Wednesday when it neared levels last seen in early September before the National Bank of Poland (NBP) shocked markets with a steep interest rate cut. However, it followed up with a smaller rate cut in October that caused markets to scale back rate cut expectations. ING analysts said in a note that the zloty has been more driven by the interest rate path than politics. "We believe PLN positioning is not necessarily tilted towards one election outcome, and we therefore do not expect a significant reaction to the election result," they said. "However, given the strong likelihood of a close result or a deadlocked parliament leading to a prolonged period of political uncertainty, we are leaning more towards a negative view of the PLN as an election outcome if we have to pick a side." In a separate note analysts from ING's Polish unit said investors had closed some of their positions ahead of the election and high volatility was possible next week. While the zloty was on track for its second weekly gain, the crown was set for a second weekly fall. The Czech currency hit its weakest level since July 2022 in after hours trading on Thursday, after central banker Tomas Holub was quoted as saying in an Amundi FundCast podcast that a cut this year could not be excluded. By 0833 GMT the crown was down 0.1% against the euro, at 24.65. Elsewhere the forint held flat, holding gains made earlier this month on reports of a potential release of EU funds. "The forint is trading between the ranges of 386 and 389, with recent attempts to break through the 386 barrier (showing) no success so far," said Zoltan Varga, analyst at Equilor. CEE SNAPSHOT AT MARKETS 1033 CET CURRENCI ES Latest Previous Daily Change bid close change in 2023 Czech 24.6500 24.6160 -0.14% -2.00% crown Hungary 386.9000 386.9000 +0.00% +3.24% forint Polish 4.5400 4.5395 -0.01% +3.29% zloty Romanian 4.9649 4.9640 -0.02% -0.45% leu Serbian 117.1100 117.1600 +0.04% +0.16% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2023 Prague 1350.40 1349.750 +0.05% +12.37% 0 Budapest 56134.94 56171.26 -0.06% +28.18% Warsaw 1961.21 1960.94 +0.01% +9.44% Bucharest 14310.74 14261.13 +0.35% +22.70% Spread Daily vs Bund change in Czech spread Republic 2-year 5-year 10-year Poland 2-year 5-year 10-year FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 6.38 5.32 4.39 7.05 PRIBOR=> Hungary < 10.22 9.05 7.48 12.09 BUBOR=> Poland < 5.21 4.84 4.55 5.70 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Karol Badohal in Warsaw, Boldizsar Gyori in Budapest and Jason Hovet in Prague; Editing by Alexander Smith)