* Polish cenbank expected to hold rates in the face of

inflation worries

* Turkey's finance minister expects economic impact of

conflict to be temporary if ceasefire holds

* Hungarian forint, stocks slip ahead of election; EU

funds release seen as potential boost

* IMF-Sri Lanka deal to unlock $700 mln; Indian elections

in focus

By Johann M Cherian

April 9 (Reuters) - Assets in major emerging markets

slipped on Thursday as investors took a breather from strong

gains in the previous session and mulled the outlook of a

fragile truce between the U.S. and Iran.

MSCI's index for emerging markets stocks slipped

0.9%, after having logged its strongest daily gain in over six

years on Wednesday as investors welcomed a two-week pause in

hostilities between the U.S. and Iran and news that energy

shipments through the Strait of Hormuz would resume.

However, fresh threats by U.S. President Donald Trump, Israel's

bombardment of Lebanon and shipments through the strategic

waterway remaining constrained suggested tensions were high

ahead of the anticipated talks between the U.S. and Iran in

Pakistan on Saturday.

Prices of crude oil, a major resource for emerging

economies, jumped over 3% and neared $100 a barrel.

Worries that elevated energy costs could stall governments'

fiscal plans sent investors back to the safe-haven dollar.

Consequently, an index tracking emerging market currencies

slipped 0.3%, with the Philippine peso

and Indonesia's rupiah down 0.5% each, while South

Africa's rand slipped 0.4% and Turkey's lira

weakened 0.2%.

A stronger dollar also would push up debt servicing costs for

governments. Hard currency bonds of Romania,

Hungary, Egypt and Kenya

dipped over 0.3 cents on the dollar.

INTEREST RATE DECISIONS

Thursday is a packed day with central bank decisions and

monetary policy commentary across developing markets as

policymakers weigh the repercussions of the conflict.

In Europe, Poland's zloty was steady against the euro

ahead of the local central bank's verdict, with economists

anticipating no change to borrowing costs.

Elsewhere in the region, investors are bracing for elections in

Hungary on Sunday that polls show could see Prime Minister

Viktor Orban's government voted out after 16 years in power.

Investors bet that funds from the European Union that were

frozen over democratic standards could be unlocked and boost the

economy if Orban loses. The forint led declines among peers

, slipping 0.4% on Thursday, while stocks lost

1.6%.

"Given that some investors do not seem to be fully convinced

that PM Orban and his Fidesz party may lose power, the forint

and Hungarian assets should respond positively if the opposition

Tisza party wins general elections," said Piotr Matys, senior FX

analyst at In Touch Capital Markets.

"That said, scope for potential gains could be constrained

if peace talks between the U.S. and Iran do not go well."

A rate decision is also expected out of Serbia later in the

day along with commentary anticipated by policymakers in Kenya,

Russia, and Argentina.

Turkey's Finance Minister Mehmet Simsek said that if a U.S.-Iran

ceasefire holds the war fallout on the economy would be

temporary and reversible, although it might take months for the

disrupted global supply chains to return to pre-war levels.

Banks in the country were down 1.1%.

Most major central banks of emerging economies have left

interest rates unchanged and have flagged the risk of inflation

pressures shooting up in the months ahead.

In some positive news, the International Monetary Fund reached a

staff-level pact with Sri Lanka, which is set to unlock

financing of about $700 million once approved, reflecting a

steady recovery of the island nation from its worst economic

crisis in decades.

However, local assets were subdued tracking global

sentiment. International bonds

were mixed, while the rupee was steady.

Elsewhere in South Asia, elections were underway in several

Indian states and could be a test for Prime Minister Narendra

Modi's government. The rupee slipped 0.6%.

Separately, brokerage BofA said there is opportunity in the

country's battered bank stocks, but the tech sector is likely to

grapple with stiff competition from newer artificial

intelligence models. Local equities benchmarks

dropped 1% each.