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UPDATE 2-CEE MARKETS-Forint rebounds as central banker sees no room to cut rates further

 (Updates with Hungary central banker on rates)
    By Anita Komuves
    BUDAPEST, Aug 25 (Reuters) - The Hungarian forint rebounded
against the euro in late Tuesday trade after a top Hungarian
central banker reiterated that there was no room to cut
short-term rates any further. 
    At its meeting earlier on Tuesday, Hungary's central bank
left its base rate unchanged at 0.6%, as expected, and announced
that it would increase the amount of its weekly government bond
purchases.
    Bond yields were unchanged immediately after the
announcement, a fixed income trader said in Budapest. 
    The forint reached a one-month low, trading 0.6%
lower against the euro at around 354 after the meeting. 
    However, it rebounded to 352.22 by 1433 GMT, after deputy
Governor Barnabas Virag told an online briefing the bank has no
room to cut short-term rates further.  nS8N2DB0AA
    The central bank, which cut its base rate in June and July,
said in a statement after the rate decision that it expects the
disinflationary effects of the coronavirus pandemic to rein in
price growth over its monetary policy horizon. 
    Markets were closely watching the bank's comments on
higher-than-expected inflation and economic recovery as
inflation came in at an annual 3.8% in July and GDP dropped by
13.6% year-on-year in the second-quarter. 
    "If the central bank were to sound more dovish, the downward
trend in HUF might continue in the near future," Commerzbank
wrote before the decision.
    Elsewhere, the zloty and the Czech crown
were stable. 
    "The Czech koruna is currently trading close to our target
of EUR/CZK 26.0 for the end of the year," Raiffeisen said.  
    However, it is "not going to appreciate to the levels we
(saw) before the pandemic shock ... The interest rate
differential with the euro area declined significantly."
    
            CEE        SNAPSHOT    AT                       
            MARKETS               1633             
                                  CET              
                       CURRENCIE                            
                       S                           
                       Latest     Previou  Daily   Change
                                  s                
                       bid        close    change  in 2020
 Czech                   26.1720  26.1000  -0.28%     -2.83%
 crown                                             
 Hungary                352.2200  351.900  -0.09%     -5.98%
 forint                                 0          
 Polish                   4.3955   4.3945  -0.02%     -3.16%
 zloty                                             
 Romanian                 4.8419   4.8395  -0.05%     -1.11%
 leu                                               
 Croatian                 7.5280   7.5325   +0.06     -1.10%
 kuna                                           %  
 Serbian                117.5000  117.600   +0.09     +0.06%
 dinar                                  0       %  
 Note:      calculated from                1800             
 daily                                     CET     
 change Latest     Previou  Daily   Change
                                  s                
                                  close    change  in 2020
 Prague                   909.05  899.940   +1.01    -18.52%
                                        0       %  
 Budapest               35740.01  35994.8  -0.71%    -22.44%
                                        3          
 Warsaw                  1820.47  1841.46  -1.14%    -15.33%
 Bucharest               8804.64  8737.14   +0.77    -11.75%
                                                %  
 Ljubljana                851.71   854.80  -0.36%     -8.01%
 Zagreb                  1616.99  1609.00   +0.50    -19.85%
                                                %  
 Belgrade   <.BELEX15     691.16   692.10  -0.14%    -13.79%
            >                                      
 Sofia                    433.71   435.17  -0.34%    -23.66%
                                                            
                       Yield      Yield    Spread  Daily
                       (bid)      change   vs      change in
                                           Bund    
 Czech                                             spread
 Republic                                          
   2-year   <CZ2YT=RR     0.1260   0.0080   +077b      -2bps
            >                                  ps  
   5-year   <CZ5YT=RR     0.6840  -0.0100   +133b      -6bps
            >                                  ps  
   10-year  <CZ10YT=R     1.0410   0.0300   +147b      -3bps
            R>                                 ps  
 Poland                                                     
   2-year   <PL2YT=RR     0.1490   0.0000   +080b      -3bps
            >                                  ps  
   5-year   <PL5YT=RR     0.7700   0.0050   +141b      -4bps
            >                                  ps  
   10-year  <PL10YT=R     1.3600   0.0120   +179b      -5bps
            R>                                 ps  
            FORWARD                                         
                       3x6        6x9      9x12    3M
                                                   interbank
 Czech Rep          <       0.36     0.36    0.43       0.34
            PRIBOR=>                               
 Hungary            <       0.76     0.84    0.90       0.61
            BUBOR=>                                
 Poland             <       0.23     0.24    0.25       0.23
            WIBOR=>                                
 Note: FRA  are for ask prices                              
 quotes                                            
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 (Additional reporting by Jason Hovet in Prague
Editing by Susan Fenton)
  
 
 
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