WARSAW, July 8 (Reuters) - The zloty firmed on Monday to

a one-month high, outperforming peers in central Europe, as the

prospect of stable interest rates for longer and a weaker dollar

boost the Polish currency.

Hungary's forint saw renewed pressure, as Budapest laid out

government plans seeking a "defence contribution" from banks,

energy firms, and multinational companies.

Last week, National Bank of Poland governor Adam Glapinski

said interest-rate cuts would not happen before 2026 as

inflation is expected to accelerate following the July no-change

decision by rate-setters for a ninth straight month.

In June, Glapinski had expressed hopes that easing could

begin in the mid-2025.

By 0916 GMT, the Polish zloty was up 0.2% to the

euro at 4.2770, a touch off of its strongest standing in over a

month hit earlier in the day.

"The EUR/PLN pair has a significant chance of reaching the

area of ​​4.25 quite quickly", ING analysts wrote, indicating

that this could happen within "a week or two".

The zloty had traded stronger than 4.25 per euro in May,

posting four-year highs.

"The weaker dollar and the unexpected tightening of the

NBP's rhetoric, which dampens expectations for any rate cuts

this year or even in 2025, help (the zloty)," ING said.

ING analysts said they expect investors to re-open

carry-trade positions in Poland, but pointed at geopolitical

worries related to the U.S. presidential election as a risk

factor.

The Czech crown held steady at 25.1630 per euro,

within its narrow range since the beginning of July, after

falling from five-month highs in early June.

"CNB (Czech National Bank) has cut the rate by more than

expected even while highlighting upside risk to inflation during

H2," Commerzbank said in a report.

"This confirmed a less hawkish 'reaction function' under

governor Ales Michl which will likely weigh on crown valuation

over the coming year."

Minutes from the CNB's late-June policy meeting, released on

Monday, quoted governor Ales Michl as saying that at coming

meetings the board should discuss the option of slowing the

decline in rates or stabilising rates for some time.

Czech rate-setters cut borrowing costs more than expected

last month, but signalled a likely slowdown in the pace of

easing amid lingering inflation pressures.

Meanwhile the forint retreated 0.5% to 394.30 per

euro from its strongest level in nearly a month, seen on Friday.

Markets are waiting for June inflation data, with a Reuters

poll consensus expecting the pace of consumer price growth and

core CPI growth to remain unchanged at 4.00%.

In mid June, Hungary's central bankers conducted their

smallest rate cut in the 14-month-old easing cycle and said the

scope for more easing in the second half would be extremely

narrow.

"The forint firmed below 392 in the morning, and the started

to weaken ... when the government presser started, so it could

be reacting to the new higher tax on banks," an FX trader in

Budapest said.

"At the same time, we could also say that it firmed as far

as it could and then we see a correction because it weakened as

fast as it firmed before. Liquidity is very low, it is July, and

this causes bigger swings. Also, everyone is looking ahead to

CPI data tomorrow."

CEE SNAPSHOT AT

MARKETS 1116

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 1572.97 1572.1 +0.05% +11.24

900 %

Budapes 71171.85 72132. -1.33% +17.41

t 83 %

Warsaw 9

Buchare 18414.65 18442. -0.15% +19.80

st 43 %

Spread Daily

vs Bund change

in

Czech spread

Republi

c

Poland

0

0

0

FORWARD RATE

AGREEMENTS

3x6 6x9 9x12 3M

interba

nk

Czech Hungary Poland Note: are for

FRA ask

quotes prices

****************************

****************************

******

(Reporting by Karol Badohal in Warsaw, Jason Hovet in Prague,

Anita Komuves and Boldizsar Gyori in Budapest; Editing by Arun

Koyyur)