May 17 (Reuters) - The Hungarian forint hit a
nine-month high on Monday after the deputy governor of the
central bank said that from June it will adjust short-term rates
proactively to tackle rising inflation risks.
    Hungary, the Czech Republic and Poland all saw inflation
spike outside their central banks' target zones in April, but
previously only the Czech central bank had been tipped by
markets to hike interest rates this year.
    "This will be a data-driven process, in several steps...and
the possibility of a hike in the base rate is worth assessing
already in June," Barnabas Virag told reporters.
    At 0821 GMT the forint was 0.73% firmer against the euro at
352.80. 
    A Budapest-based fixed income dealer said long-end bond
yields went up 5 basis points, while short-end yields went up 15
basis points.
    "The central bank took markets by surprise... in that we now
expect some form of a tightening cycle, not a single hike. How
much they will hike, that's the million dollar question," the
dealer said.
    The Hungarian central bank has consistently said it has no
foreign exchange goal but it would fight inflation proactively.
    Takarekbank economist Gergely Suppan said that forward rate
agreements (FRAs) were pricing in that the base rate, currently
at 0.6%, would probably be moved in line with the one-week
deposit rate, which is currently 0.75%. The one-week deposit
rate is expected to rise to 0.9% by next month, Suppan said.
    The Polish zloty and the Czech crown
were both a touch firmer, strengthening 0.06% and 0.05%
respectively.
    In Poland, the government on Saturday presented its "Polish
Deal" economic programme, promising lower taxes for most, higher
healthcare spending and help to buy homes.
    "This programme is undoubtedly aimed at people with
relatively lower incomes, which should favour consumption
growth," Bank Millennium analysts said in a note.
    Poland's WIG 20 index was up 1.11%. The main
indices in Prague and Budapest were up 0.39% and
0.22% respectively.
    "The most recent economic plan will affect companies exposed
to retail demand such as Dino / Jeronimo Martins / Eurocash /
Allegro," said Ipopema analyst Robert Maj.
    Shares in Allegro rose over 4.5%, the biggest
gainers on the WIG 20.
    
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1021              
                                     CET               
                                                              
                   CURRENC                                    
                   IES                                 
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2021
 EURCZK  Czech                                       
 EURHUF  Hungary                0        0           
 EURPLN  Polish                                      
 EURRON  Romanian                                    
 EURHRK  Croatian                                    
 EURRSD  Serbian                0        0           
         Note:     calcula                    1800            
         daily     ted                        CET      
         change    from STOCKS                                     
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2021
 .PX     Prague             1126.16  1121.81   +0.39%   +9.64%
                                          00           
 .BUX    Budapest           45531.1  45429.1   +0.22%   +8.13%
                                  8        2           
 .WIG20  Warsaw    <.WIG20  2116.03  2092.80   +1.11%   +6.66%
                   >                                   
 .BETI   Buchares           11621.3  11593.4   +0.24%   +18.52
         t                        8        9                 %
 .SBITO  Ljubljan  <.SBITO  1079.04  1074.68   +0.41%   +19.78
 P       a         P>                                        %
 .CRBEX  Zagreb    <.CRBEX  1939.30  1940.04   -0.04%   +11.50
                   >                                         %
 .BELEX  Belgrade  <.BELEX   761.62   759.38   +0.29%   +1.74%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   523.40   522.39   +0.19%   +16.95
                   >                                         %
                                                              
                   BONDS                                      
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year                                s  
 CZ5YT=    5-year                                s  
 CZ10YT                                         s  
         Poland                                               
 PL2YT=    2-year                                s  
 PL5YT=    5-year                                s  
 PL10YT                                         s  
                                                              
                   FRA                                        
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech                                      
         Hungary                                     
         Poland                                      
         Note: FRA quotes                                     
         are for ask                                   
         prices                                        
         ***********************************                  
         ***************************                   
                                                              
 
 (Reporting by Alan Charlish in Warsaw, Marton Dunai in Budapest
and Anna Banacka in Gdansk; editing by Emelia Sithole-Matarise)