(Recasts with zloty)

By Alan Charlish

WARSAW, May 20 (Reuters) - The Polish zloty

was at its strongest against the euro since February 2020 on

Monday, as improved relations with the European Union and an

inflow of funds from Brussels boosted the currency.

At 1338 GMT, the zloty was 0.20% firmer against the euro

at 4.2525.

"There are some important factors that have influenced

the Polish currency for a few months already," said Aleksandra

Swiatkowska, an economist at Polish bank BOS. "The improvement

in the current account ... the balance of payments, EU fund

flows."

Swiatkowska said that even if funds were not necessarily

exchanged on the market, traders' awareness of an inflow of

euros was positive for the zloty.

The next trigger for the zloty could be a raft of data

for April including industrial output, which fell much more than

expected in March.

"March figures from Poland were very disappointing, and

we are hoping that the numbers we will see this week for April

will be potentially better, supporting expectations for monetary

easing by the National Bank of Poland," said Piotr Poplawski,

senior economist at ING in Warsaw.

Meanwhile, the Hungarian forint firmed in thin

trade, with local markets closed for holidays, as investors

looked ahead to an interest rate decision in Hungary on Tuesday.

Hungary's central bank is expected to cut its base rate by

another 50 basis points to 7.25% on Tuesday, according to a

Reuters poll, in line with the bank's latest guidance for a

slower pace of easing after steep rate cuts in the past year.

"We have the MPC meeting in Hungary, we expect a 50

basis-point cut and so does the market," said Poplawski.

"Perhaps it should not have that much of a groundbreaking effect

on the market, but we'll see."

The forint was 0.35% firmer against the euro

at 385.65.

The Czech crown was 0.22% weaker at 24.757.

Warsaw's blue-chip WIG 20 stock index was up 0.59%,

boosted by mining stocks KGHM and JSW.

"In terms of KGHM the company is related to the mining of

copper and silver which right now are in a bull market," said

Erste Group analyst Jakub Szkopek.

Szkopek said that JSW was rebounding after falling heavily

in recent months.

CEE SNAPSHOT AT

MARKETS 1538 CET

CURRENCI

ES

Latest Previous Daily Change

bid close chang in 2024

e

EURCZK= Czech %

EURHUF= Hungary 5%

EURPLN= Polish 0%

EURRON= Romanian %

Note: calcula 1800

daily ted CET

change from

Latest Previous Daily Change

close chang in 2024

e

.PX Prague 1566.98 1561.390 +0.3 +10.82%

0 6%

.BUX Budapest 68088.24 68088.24 +0.0 +12.32%

0%

.WIG20 Warsaw 9%

.BETI Buchares 17539.68 17362.79 +1.0 +14.11%

t 2%

Sprea Daily

d

vs change

Bund in

Czech spread

Republic

CZ2YT=R 2-year bps

CZ5YT=R 5-year bps

CZ10YT= bps

Poland

PL2YT=R 2-year bps

PL5YT=R 5-year bps

PL10YT= bps