BUCHAREST, July 5 (Reuters) – Central European stocks trailed European indices lower on Tuesday, pushed by growing fears of recession, as the Hungarian forint hit a record low against the euro. Elsewhere in the region, Polish and Romanian central bankers are expected to raise benchmark interest rates this week, but their currencies have been little moved. As of 0950 GMT, the Budapest and Warsaw blue chip indices were each down 1.0% on the day, while those in Bucharest fell 0.8%. The forint was trading at 406.0000 to the euro, a record low and down 0.9% on the day. The Polish zloty was 0.7% weaker, while the Romanian leu, tightly controlled by the central bank, was stable. “The stronger dollar is putting pressure on the forint, as some market participants may try to push the central bank to raise its one-week deposit rate by more than 30 basis points on Thursday by weakening the forint,” the statement said. an FX trader said Budapest. “This means that the forint could continue to relax until Thursday.” The bank uses the one-week deposit rate to deal with short-term market volatility and sets the interest rate every Thursday. Last week, it raised its base rate by 185 basis points and its one-week deposit rate by 50 basis points, bringing both rates to 7.75%. The forint is the worst performer in central Europe so far this year, losing more than 9% against the euro, held back by soaring inflation, negative real interest rates and a lack of agreement between the Hungarian government and Brussels on the release of EU funds. In Romania, policymakers are expected to raise the policy rate by 75 basis points to 4.50% on Wednesday, still the lowest among its regional peers. However, BCR bank said in a research note that tight liquidity controls kept market rates high, leading to “tighter monetary conditions than the policy rate suggests.” Polish central bankers are also expected to rise 75 basis points on Thursday. “The zloty remains under moderate pressure from the external environment,” Bank Millennium said in a note. “Waiting for the outcome of Thursday’s meeting of the Monetary Policy Council and Friday’s conference of the President of the National Bank of Poland prevents the zloty from weakening further. “A 75 basis point rate hike in line with consensus would be relatively neutral for the zloty’s valuation.” CEE MARKET OVERVIEW T 1211 CET CURRENCIES Last Change of Last Daily Change Supply Closing in 2022 Czech Hungary 0 0 Polish Romanian Croatian Serbian 0 0 0.00% #VALUE! 00 Budapest 39398.8 39707.1 -0.78% -22.32% 3 9 Warsaw 1678.69 1693.10 -0.85% -25.95% Buchare 12252.4 12368.8 -0.94% -6.19% T 9 3 L devrjan <. belgrade> Sofia 610.32 609.24 +0.18% -3.99% Yield Yield Spread Daily (bid) exchange vs Bund change in spread Czech Republic 2-year s 5- Year ss Poland 2 years s 5 years ss FORWARD 3×6 6×9 9×12 3M interba nk Czech 7.51 7.42 6.80 7.23 Hungary 10.79 10.89 10.95 8.51 Poland 7.97 8.02 7.81 7.08 ****** ********************************************** *** * (Reporting by Luiza Ilie in Bucharest, Anita Komuves in Budapest and Pawel Florkiewicz in Warsaw; Editing by Barbara Lewis)