UPDATE 1-CEE MARKETS-Forint falls, then rises, after scaled-back rate hike

(Updates after Hungary rate decision) PRAGUE, Sept 21 (Reuters) - The forint fell to a six-week low on Tuesday before quickly rebounding as the Hungarian central bank surprised with a scaled-back interest rate hike but confirmed its tightening cycle remained on course. Hungary's central bank raised its base rate by 15 basis points to 1.65%, delivering its fourth rate hike in a row to curb rising inflation as the economy rebounds strongly from the effects of the coronavirus pandemic. The rate of increase, though, missed expectations of a 25 basis point rise seen in a Reuters poll, pushing the forint down as much as 0.4% on the day to trade at a session low of 355.10 to the euro after the midday decision. But it rebounded less than an hour later - and was near session highs hit in morning trade - after the central bank lifted inflation forecasts and said rate tightening would continue and it would reduce bond purchases. By 1348 GMT, the forint had gained 0.3% on the day to trade at 353.50 to the euro. "The post-meeting communications certainly struck a more hawkish tone than the decision to slow the pace of tightening might have suggested," Capital Economics said. The forint along with the Czech crown have been the best-performing currencies in central Europe in 2021 as their respective central banks became the first in the European Union to begin lifting interest rates, starting in June. The slower tightening pace from Hungary - following three previous rate moves of 30 basis points - comes as the Czech central bank looks certain to accelerate its rate hike cycle. Czech central banker Tomas Holub told Reuters in an interview published on Tuesday that he would likely support a 50 basis point rate increase at the next policy meeting. That added to signals that the central bank could deliver its biggest hike since 1997 next week, after two earlier standard 25 basis point moves. Market interest rates ticked up - with up to 100 basis points in hikes priced in to the end of 2021. The crown rose 0.2% on the day, to 25.426 to the euro. Poland's zloty struggled, losing 0.4% to 4.625 to the euro. The Polish central bank, unlike peers in the region, has been hesitant to begin raising interest rates, wary of damaging an economic recovery even as inflation surges to a two-decade high. CEE SNAPSHO AT 1548 CET MARKETS T CURRENCIES 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: calculated from 1800 daily CET change STOCKS Latest Previou Daily Change s close change in 2021 .PX Prague 1293.29 1285.49 +0.61% +25.91 00 % .BUX Budapest 51353.9 50982.1 +0.73% +21.96 0 5 % .WIG20 Warsaw <.WIG20 2284.61 2272.52 +0.53% +15.15 > % .BETI Buchares 12355.6 12220.9 +1.10% +26.01 t 5 9 % .SBITO Ljubljan <.SBITO 1152.54 1137.37 +1.33% +27.94 P a P> % .CRBEX Zagreb <.CRBEX 1950.24 1939.57 +0.55% +12.13 > % .BELEX Belgrade <.BELEX 795.74 797.46 -0.22% +6.30% 15 15> .SOFIX Sofia <.SOFIX 560.26 553.69 +1.19% +25.19 > % BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread 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 Jason Hovet in Prague and Gergely Szakacs in Budapest Editing by Raissa Kasolowsky and Steve Orlofsky)