PRAGUE, Sept 20 (Reuters) - Central Europe's currencies

steadied against the euro on Friday, with the Hungarian forint

and Czech crown holding near recent levels ahead of central bank

policy meetings next week that may deliver further interest rate

cuts.

After mostly shrugging off the U.S. Federal Reserve's

decision to start its easing cycle with a larger than usual

interest rate cut this week, focus was turned to central

European policymakers.

Markets were pricing in chances of Hungarian and Czech

rate-cutting cycles at meetings on Tuesday and Wednesday,

respectively.

The forint was steady at 394.10 to the euro at

1022 GMT, sitting in the middle of recent trading ranges.

"We now expect the NBH to ease at both its September and

October meetings, as opposed to only in October previously, on

the back of more favourable global financial conditions," Morgan

Stanley said in a note.

Expected rate cuts by major central banks could create space

to ease monetary conditions further in emerging markets, the

National Bank of Hungary (NBH) said in the minutes of its August

27 policy meeting released last week.

The bank had left its base rate steady at the European

Union's highest level of 6.75% last month after 15 consecutive

cuts worth a combined 1,125 basis points.

The Czech National Bank has also slowed it rate-cutting pace

in an easing drive started last December. Markets see chances of

another 25-basis-point cut, to bring the main rate to 4.25%, its

lowest level since the end of 2021.

The crown was also steady at 25.096 per euro.

Czech bond yields were also little moved by the first

estimates of the cost of the massive flooding in central Europe

in the past week. The Czech Finance Ministry said on Thursday it

would provide 30 billion crowns ($1.34 billion) to tackle flood

damage under an amendment of its 2024 budget.

"We see relatively low impact to spreads," Sergey Dergachev,

a portfolio manager at Union Investment, said.

"What we are monitoring is ... what will be the impact of

those heavy floods on the political situation in those countries

affected. We will have elections in Romania."

"And what will happen next week in Austria. Even though

Austria is not (an emerging market), it's outcome is also very

crucial for central Europe."

In Poland, the zloty eased 0.1% to 4.2775 per euro

while Romania's leu was unchanged at 4.9745 to the

euro.

CEE SNAPSHOT AT

MARKETS 1222

CET

CURRENCIES

Latest Previo Daily Change

us

trade close change in 2024

Czech 0

Hungary 00

Polish Romania Serbian 00

Note: calcula 1800 CET

daily ted

change from

Latest Previo Daily Change

us

close change in 2024

Prague 1584.10 1584.0 +0.01% +12.03

100 %

Budapes 72817.10 73084. -0.37% +20.12

t 05 %

Warsaw 0

Buchare 17649.71 17629. +0.12% +14.82

st 06 %

Spread Daily

vs Bund change

in

Czech spread

Republi

c

0

Poland

FORWARD RATE

AGREEMENTS

3x6 6x9 9x12 3M

interba

nk

Czech Hungary Poland Note: are for

FRA ask

quotes prices

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