By Anita Komuves BUDAPEST, October 19 (Reuters) – The Hungarian forint dominated gains in the region on Tuesday as some investors bet on a larger-than-expected hike in its benchmark interest rate at its meeting later in the daytime. According to a survey of Reuters analysts, the BNH is expected to raise its key rate by 15 basis points to 1.8%. The bank will announce its decision at 12:00 GMT and a statement will follow at 13:00 GMT. The forint strengthened 0.51% to 360.00 per euro after falling to its lowest level since July during the previous session. Some market participants expect a rate hike of more than 15 basis points, which supports the forint, two forex traders in Budapest said. “Analysts now agree that high inflation is here to stay, and the market has started to realize that something has to happen,” said one trader. Commerzbank wrote that a 15 basis point hike is included in the price and that it “is unlikely to provide much support to the forint.” The currency has given up almost all of its gains since the National Bank of Hungary (NBH) began to tighten in June as it slowed the pace of rate hikes last month despite raising its inflation expectations . Assistant Prime Minister Viktor Orban Marton Nagy said on Tuesday that Hungary’s central bank had launched a “reluctant” round of tightening amid a massive fiscal push from the government, resulting in a political divergence. A surge in price growth in Eastern Europe has opened a wedge between central banks who have launched rate hikes to fight inflation and populist governments trying to defend a strong economic recovery. Hungarian government bond yields were flat on Tuesday after surging at the long end of the curve in the previous session when yields rose around 15 basis points along with yields in Poland. “This is not unique to Hungary, there has been a massive sell-off in regional newspapers recently as inflation expectations rise,” said a fixed income trader in Budapest. The Polish zloty gained as risk appetite increased globally, although this “will be offset by the lingering political risk to the Polish currency,” Bank Millennium wrote in a note. A row between Warsaw and Brussels escalated this month when the Polish Constitutional Court ruled that parts of EU treaties are incompatible with the constitution. The zloty was up 0.4% and trading at 4.5716 per euro. The Czech crown rose 0.09%, stuck near the 25.4 mark. Markets are anticipating another sizeable 75 basis point hike at the bank’s next meeting in early November. Stocks in the region were mixed, with Prague outperforming and adding 0.28% CEE SNAPSHO AT MARKETS T 1118 CET CURRENC IES Last previous daily change Offer closed in 2021 EURCZK = Czech EURHUF = Hungary 0 EURPLN = Polish EURRON = Romania EURHRK = Croatia EURRSD = Serbian 0 Note: calculated from 1800 daily CET variation Last previous daily variation close to 2021 .PX Prague 1358.31 1354.540 + 0.28% +32.24 0% .BUX Budapes 54525.7 54637.92 -0.21% +29.49 t 3 % .WIG20 Warsaw 2461.97 2459.81 +0.09% + 24.09% .BETI Bucare 12,680.8 12,669.78 + 0.09% +29.32 st 8% .SBITOP Ljublja <.sbitop na> % .CRBEX Zagreb 2046.14 2042.40 + 0.18% + 17.64% .BELEX1 Belgrad <.belex e> .SOFIX Sofia 576.69 578.72 -0.35% + 28.86% Yield Yield Spread Daily variation (bid) vs Bund variation of the Czech spread Republished CZ2YT = R s CZ5YT = R s CZ10YT = s Poland PL2YT = R s PL5YT = R s PL10YT = s FORWARD 3×6 6×9 9×12 3M Czech interbank 3.22 3.49 3.55 2.06 Republic of Hungary 2.65 2.99 3.23 1.89 Poland 1.58 2.00 2 , 41 0.69 ********** ******************* (Additional reporting by Alan Charlish in Warsaw and Robert Muller and Jason Hovet in Prague; Editing by Krishna Chandra Eluri)