CEE MARKETS-Forint bounces off 6-month low; zloty weaker ahead of EU leaders' meet

PRAGUE, Oct 21 (Reuters) - Hungary's forint bounced off a six-month low on Thursday after a central banker said more rate tightening than projected was needed, easing investor disappointment following a timid rate hike this week. The Hungarian central bank voted for a 15-basis-point interest rate increase on Tuesday, continuing a tightening cycle that started in June but at a slower pace. Some had bet on a stronger move, which caused the forint to weaken as they closed positions. But the forint recovered ground on Thursday, after Bloomberg news reported that central bank Deputy Governor Barnabas Virag said the bank needed to tighten monetary conditions more than projected in September. The forint traded down 0.1% on the day at 362.64 to the euro at 0959 GMT, after hitting a low of 364 earlier in the session. With policy tightening starting already around central Europe to battle an inflation spike, the region's currencies have been caught between higher rate expectations and a strong U.S. dollar that is weighing on risk appetite. The forint has been most under pressure, along with the Polish zloty. The zloty was feeling added weight on Thursday before a European Union leaders meeting in Brussels that will put Warsaw in the spotlight because of a Polish court ruling that questioned the primacy of European laws, part of an ongoing dispute that risks costing the country EU funding. The zloty eased 0.2% to 4.594 per euro. Poland's dispute with the EU has for now barred it from tapping into 57 billion euros of emergency funds to help its economy emerge from the COVID-19 pandemic. "The EUR / PLN exchange rate is consolidating around the level of 4.58, awaiting, among others, the decisions on the National Recovery Plan by Brussels," Bank Millennium said. The Czech crown also dropped further beyond the 25.50 level it breached this week, amid a weakening outlook for the car sector because of the global chip shortage. Czech rate markets, though, continue to price in steep tightening for the rest of the year, following up the central bank's surprise 75 basis point hike last month, which was its biggest single upward move in 24 years. Central European stock markets were mixed in other trading, holding off record or multi-year highs hit this month amid a global rise in company shares. CEE SNAPSHO AT MARKETS T 1159 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 1341.17 1345.16 -0.30% +30.57 00 % .BUX Budapest 54610.5 54393.6 +0.40% +29.69 0 3 % .WIG20 Warsaw <.WIG20 2426.89 2443.11 -0.66% +22.32 > % .BETI Buchares 12813.4 12750.3 +0.50% +30.67 t 5 0 % .SBITO Ljubljan <.SBITO 1185.12 1186.07 -0.08% +31.56 P a P> % .CRBEX Zagreb <.CRBEX 2054.10 2049.78 +0.21% +18.10 > % .BELEX Belgrade <.BELEX 788.10 791.01 -0.37% +5.28% 15 15> .SOFIX Sofia <.SOFIX 571.95 572.66 -0.12% +27.80 > % 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 Jason Hovet in Prague, Anita Komuves in Budapest, and Alan Charlish in Warsaw; Editing by Shinjini Ganguli)