WARSAW, Sept 25 (Reuters) - The crown edged lower on

Wednesday before an expected Czech interest rate cut while the

forint touched a 1-1/2 week low after Hungarian rate setters

resumed their policy easing after a short pause.

The Czech and Hungarian central banks have been the most

consistent in central Europe in loosening policy since last

year, with the latter reducing what had been the highest rates

in Europe through a combined 1,150 basis points in cuts.

Hungary's central bank, after a pause last month, cut

interest rates again on Tuesday and markets expect the Czech

National Bank to deliver a 25-basis-point rate cut later on

Wednesday.

By 1022 GMT the crown had eased 0.12% to 25.1240

per euro, pulling back after slowly firming toward the

psychological 25 per euro level in previous sessions.

ING said inflation that has been above central bank

forecasts may prompt the bank to stay hawkish in its outlook,

which could give the crown a boost.

"We believe the CNB can push EUR/CZK below 25.00 today," ING

said.

On Tuesday, the National Bank of Hungary (NBH) trimmed its

base rate by 25 basis points to 6.5%, aided by a

drop in inflation and last week's larger-than-usual cut by the

U.S. Federal Reserve.

The NBH cut put Hungary's benchmark rate on par with

Romania's, but still at the European Union's highest level.

The forint was 0.11% lower against the euro at

394.90, a shade weaker than before the rate cut and near the

middle of the range it has traded in since early June.

Equilor brokerage analysts said Hungarian rate setters will

need to balance the inflation outlook and price developments in

the services sector, along with the risks in external trade, the

country's budget, and financial market stability.

The forint has been the worst performer in central Europe

this year, with a 3% drop, although markets took Tuesday's cut

with some steadiness as the forint is still hovering in a range

of 390-399 to the euro seen since July.

In Poland, the zloty was 0.14% lower against the

euro at 4.2645, giving back most of the gains it made on Tuesday

when it firmed to its strongest since mid-July.

"The zloty continues to benefit from growing expectations of

interest rate cuts by major central banks. However, support at

4.25 should slow down the pair's declines," Alior Bank analysts

said.

Poland's central bank has repeatedly pointed to uncertainty

in keeping its main rate steady at 5.75% since surprise cuts

last fall.

CEE SNAPSHOT AT

MARKETS 1222 CET

CURRENCI

ES

Latest Previous Daily Change

trade close change in 2024

Czech Hungary Polish Romanian Serbian Note: calculated from 1800 CET

daily

change

Latest Previous Daily Change

close change in 2024

Prague 1586.16 1582.750 +0.22% +12.17%

0

Budapest 73627.66 73557.89 +0.09% +21.46%

Warsaw 2338.10 2337.49 +0.03% -0.21%

Bucharest 17650.34 17644.15 +0.04% +14.83%

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 3.71 3.42 3.11 4.28

Hungary 5.90 5.50 5.04 6.35

Poland 5.76 5.36 4.69 5.85

Note: FRA are for ask prices

quotes

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