PRAGUE, Sept 10 (Reuters) - Hungary's forint snapped a three-day rally on Thursday, leading central Europe's currencies lower after the central bank signalled a slower economic recovery from the coronavirus pandemic. The Polish zloty also paused a slight rebound seen this week after it touched a six-week low last Friday while the Czech crown continue to drift lower, with a test of another important technical level in sight. Stock markets also mostly slipped as Warsaw had lost 0.9% by 0855 GMT and Budapest was down 0.7% Hungarian bank OTP fell more than 1% when the country's central bank called on commercial banks to extend a suspension of dividend payments until Jan. 1, 2021. Central bank Deputy Governor Barnabas Virag said on Thursday Hungary's recovery from the coronavirus pandemic would be more protracted than previously expected. The forint was down 0.2% mid-morning at 357.40 to the euro, giving up gains from the previous session when the central bank launched swap tenders for foreign currency liquidity. The zloty also lost 0.2% while the crown was off 0.1% and unmoved by August inflation on Thursday that showed price growth above the central bank's tolerance band around its 2% target for a third straight month. The Czech bank has signalled it is keen to keep its key rate at 0.25% going ahead and was ready to tolerate elevated inflation. Hungary has also seen inflation spike, putting its central bank in a tough spot as it keeps policy loose amid the pandemic. Commerzbank analysts said higher inflation could be negative for the forint as it was unlikely to get a hawkish reaction. "We really doubt that the MPC can achieve consensus to stay ahead of the curve when the time really comes to normalise rates," it said. "If the central bank is not going to respond to higher inflation with higher rates, then the effect of higher inflation on the exchange rate is negative, not positive." CEE SNAPSHO AT MARKETS T 1055 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech crown <EURCZK 26.5550 26.5215 -0.13% -4.23% = => EURHUF Hungary forint <EURHUF 357.400 356.670 -0.20% -7.35% = => 0 0 EURPLN Polish zloty <EURPLN 4.4502 4.4397 -0.24% -4.35% = => EURRON Romanian leu <EURRON 4.8580 4.8585 +0.01% -1.43% = => EURHRK Croatian kuna <EURHRK 7.5350 7.5315 -0.05% -1.19% = => EURRSD Serbian dinar <EURRSD 117.480 117.580 +0.09% +0.08% = => 0 0 Note: daily change calculated from 1800 CET STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 901.36 900.680 +0.08% -19.21% 0 .BUX Budapest 34896.9 35142.7 -0.70% -24.27% 4 4 .WIG20 Warsaw <.WIG20 1758.07 1773.37 -0.86% -18.23% > .BETI Bucharest 9131.90 9082.08 +0.55% -8.47% .SBITO Ljubljana <.SBITO 848.99 849.40 -0.05% -8.30% P P> .CRBEX Zagreb <.CRBEX 1606.19 1605.17 +0.06% -20.38% > .BELEX Belgrade <.BELEX 687.45 690.10 -0.38% -14.25% 15 15> .SOFIX Sofia <.SOFIX 433.26 435.07 -0.42% -23.74% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread CZ2YT= 2-year <CZ2YT= 0.1710 -0.0320 +086bp -3bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.6610 -0.0670 +134bp -6bps RR RR> s CZ10YT 10-year <CZ10YT 1.0680 -0.0560 +154bp -5bps =RR =RR> s Poland PL2YT= 2-year <PL2YT= 0.0830 0.0050 +077bp +1bps RR RR> s PL5YT= 5-year <PL5YT= 0.6950 -0.0250 +138bp -2bps RR RR> s PL10YT 10-year <PL10YT 1.3730 -0.0200 +184bp -1bps =RR =RR> s FRA 3x6 6x9 9x12 3M interba nk Czech Rep <CZKFRA 0.37 0.38 0.42 0.34 ><PRIBO R=> Hungary <HUFFRA 0.79 0.86 0.92 0.63 ><BUBOR => Poland <PLNFRA 0.19 0.20 0.21 0.23 ><WIBOR => Note: FRA quotes are for ask prices ******************************************************* ******* (Reporting by Jason Hovet in Prague and Anita Komuves in Budapest; Editing by Toby Chopra)
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