By Anita Komuves BUDAPEST, December 2 (Reuters) – The Hungarian forint strengthened to a three-week high on Thursday after the central bank raised its deposit rate to one week, raising rates for the fifth time in under three weeks as he battles rising inflation. The forint was up 0.33%, trading at 361.35 per euro after the central bank raised its one-week deposit rate by 20 basis points to 3.1%, continuing a series of rate hikes. The currency has strengthened nearly 3% since November 23, when it fell to a record low of 372 against the euro. “These clear steps should be enough to stabilize the forint and keep it away from the 370 level,” said an FX trader in Budapest. “If global fears about the Omicron variant ease, it may level off above 360.” The forint was also lifted by comments from central bank governor Gyorgy Matolcsy, who said on Wednesday that rate hikes would continue into 2022 and that the bank would end its quantitative easing program soon. Long-term Hungarian government bond yields rose 1-3 basis points after rising around 20 basis points in the previous session, reacting to the rate hike and following base yields , said two fixed income traders in Budapest. The yield on the 10-year bond was approximately 4.65%. “This is such a high level that I expect a turnaround soon, especially with the strengthening of the forint,” said one FI trader. Hungary is also holding auctions of government bonds on Thursday. The Polish zloty extended its gains, firming to a three-week high adding 0.32% and trading at 4.6030 against the common currency, supported by expectations of further rate hikes after inflation November hit a two-decade high of 7.7%. The Czech crown was up 0.24% and traded at 25.400 to the euro. “Further hawkish moves by (central) banks in the EEC region should support their currencies,” PKO Bank wrote in a client note. Stock markets in the region were mixed, with Warsaw stocks weakening 0.55%. Prague was up 0.07%, while the Budapest index was down 0.19%. Bucharest up 0.26%. SNAPSHOT OF EEC MARKETS 1025 CET CURRENCI ES Last daily change previous hm offer closing in 2021 EURCZK Czech% EURHUF Hungary% EURPLN Polish% EURRON Romania EURHRK Croatia EURRSD Serbian% PX Prague 1364.10 1363.160 +0.07 +32.81 0%% .BUX Budapes 51764.15 51860.19 -0.19% +22.93 t% .WIG20 Warsaw <.wig20> % .BETI Buchare 12226.77 12195.61 +0.26% +24.69 st .SBITO Ljublja <.sbito p na> % .CRBEX Zagreb <.crbex> % .BELEX Belgrad <.belex e> .SOFIX Sofia <.sofix> % Yield Yield Spread Daily variation (bid) vs Bund variation in Czech spread Republished CZ2YT = ps CZ5YT = ps CZ10YT ps Poland PL2YT = ps PL5YT = ps PL10YT ps FOR 3×6 6×9 9×12 3M interbank Czech Hungary Poland Note: are for requesting quote FRA ********************************* ********* ** **** ************** (additional reporting by Alan Charlish in Warsaw; Editing by David Goodman and Shailesh Kuber)