PRAGUE, Aug 29 (Reuters) - Polish bond yields climbed

for a second straight session on Thursday, hitting a one-month

high, after the country unveiled a 2025 budget plan with a

rising deficit, while central Europe's currencies mostly moved

to firmer levels after recent weakness.

Poland's government expects its general budget deficit to

rise to 5.5% of gross domestic product in 2025, up from 5.1%

seen this year, as it ramps up defence spending and drops some

practices of the former administration that critics said kept

costs off the books.

The rising deficit poses a challenge for eastern Europe's

biggest economy which is already facing European Union budget

discipline measures.

The 10-year benchmark bond yield climbed around

5 basis points and was bid at 5.567% at 0926 GMT, up 16 bps

since Wednesday's open before the budget announcement.

"The bottom line is that the fiscal policy in Poland in

2024-2025 is going to be more expansive than earlier suggested,"

Santander Bank Polska said in a note.

The zloty also firmed against the euro, up 0.1% at

4.2915, with the growth outlook - which was raised in the budget

assumptions - providing some support.

In Hungary, the forint rose 0.2% to 392.65 to the

euro.

Hungarian bond yields are also likely to face upward

pressure after the head of the government debt agency said it

would focus more on borrowing from domestic bonds and sources to

keep foreign currency debt levels within limits.

On stock markets, some shares shed morning gains.

Czech utility CEZ hit a near four-month low and

was set to log losses for a third straight session after the

country's finance ministry scrapped the idea of ending a

windfall tax next year.

CEE SNAPSHOT AT

MARKETS 1126

CET

CURRENCIES

Latest Previo Daily Change

us

trade close change in 2024

Czech 0

Hungary 00

Polish Romania Serbian 00

Note: calculated from 1800 CET

daily

change

Latest Previo Daily Change

us

close change in 2024

Prague 1578.45 1573.6 +0.31% +11.63

500 %

Budapes 73074.50 72838. +0.32% +20.55

t 51 %

Warsaw 4

Buchare 18277.07 18270. +0.04% +18.91

st 37 %

Spread Daily

vs Bund change

in

Czech spread

Republi

c

Poland

FORWARD RATE

AGREEMENTS

3x6 6x9 9x12 3M

interba

nk

Czech Hungary Poland Note: are for ask prices

FRA

quotes

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