CEE MARKETS-Hungary's forint, bond yields stable as investors eye cenbank meeting

       By Anita Komuves
       BUDAPEST, Nov 22 (Reuters) - The forint eased on Tuesday
while government bond yields held stable as markets assessed the
Hungarian government's decision to cap interest rates on large
commercial bank deposits and focus turned to the central bank
rate meeting later in the day.
    Long-term bond yields were unmoved after a drop of about 25
basis points in the previous session. The yield on the benchmark
10-year bond was about 7.90%, fixed-income traders said.
    Yields fell on Monday following an announcement that
commercial banks cannot pay an interest rate higher than the
three-month discount bill yield on deposits by certain large
institutional and private investors.
    "Bond yields have dropped significantly since the beginning
of this month, that is why we did not see a bigger reaction," a
trader said.
    "And markets are still assessing the decision, as this can
hurt the monetary transmission mechanism."
    The National Bank of Hungary announced an emergency rate
hike last month and introduced a quick deposit facility with an
18% interest rate.
    The yield on the three-month discount bill was about 12% on
Tuesday.
    The government debt management agency AKK held an auction on
Tuesday where it sold three-month discount bills at an average
yield of 12.82%.
    The forint was trading 0.15% lower at 408.30 per
euro on Tuesday.
    "The forint is stable, which is somewhat strange as the
message (of the rate cap) is negative as the government is
lowering interest rates when the central bank is raising them,
looking like two key actors working against one another," a FX
trader in Budapest said.
    The forint was moving sideways as investors awaited details
of the interest rate cap and focused on reports of negotiations
between Hungary and the European Union over funds, according to
traders.
    Markets also eyed the central bank's interest rate decision
and comments due later in the day. A Reuters poll of analysts
expects the bank to keep its base rate on hold at 13%.
    Elsewhere, the Polish zloty weakened 0.19% to
4.7055 per euro.
                  CEE      SNAPSH   AT
                  MARKETS  OT      1043
                                   CET
                           CURREN
                           CIES
                           Latest  Previo  Daily   Change
                                   us
                           bid     close   change  in
                                                   2022
 EURCZK  Czech    0       0               %
 EURHUF  Hungary  00      00
 EURPLN  Polish   EURRON  Romania  %       %
 EURHRK  Croatia  %
 EURRSD  Serbian  00      00       %       %
         Note:    calcula                  1800
         daily    ted                      CET
         change   from

                           Latest  Previo  Daily   Change
                                   us
                                   close   change  in
                                                   2022
 .PX     Prague            1239.6  1242.7  -0.25%
                                3     200
 .BUX    Budapes           45034.  44592.   +0.99  -11.21
         t                     78      90       %       %
 .WIG20  Warsaw   2       0       %       %
 .BETI   Buchare           11700.  11690.   +0.09  -10.42
         st                    58      03       %       %
 .SBITO  Ljublja  7       0               %
 .CRBEX  Zagreb   1       6       %
 .BELEX  Belgrad  .SOFIX  Sofia    %

                           Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
         Republi
         c
 CZ2YT=           ps
 CZ5YT=           0      ps
 CZ10YT           0      ps
         Poland
 PL2YT=           0      ps
 PL5YT=           0      ps
 PL10YT           0      ps
                  FORWARD
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech    Hungary  Poland   Note:    are for
         FRA      ask
         quotes   prices
         ********************************
         ******************************
 (Additional reporting by Alan Charlish in Warsaw; Editing by
Shounak Dasgupta)