The Hungarian forint firmed to a three-week high on Thursday after the central bank hiked its one-week deposit rate, raising rates for the fifth time in under three weeks as it is battling rising inflation. The forint was 0.33% higher, trading at 361.35 per euro after the central bank raised its one-week deposit rate by 20 basis points to 3.1%, continuing a series of rate hikes. read more The currency has firmed nearly 3% since Nov. 23 when it fell to a record low of 372 versus the euro. "These clear steps should be enough to stabilize the forint and keep it away from the 370 level," an FX trader in Budapest said. "If the global fears about the Omicron variant subside, it could firm past 360." The forint was also lifted by Central Bank Governor Gyorgy Matolcsy"s comments who said on Wednesday that rate hikes will continue in 2022 and that the bank will phase out its quantitative easing programme soon. read more Hungarian long-term government bond yields ticked 1-3 basis points higher after an about 20 basis-point rise in the previous session, reacting to the rate hike and tracking core yields, two fixed-income traders in Budapest said. The yield on the 10-year bond was about 4.65%. "This is such a high level that I expect a turnaround soon, especially with the forint firming," one FI trader said. Hungary also holds government bond auctions on Thursday. The Polish zloty extended its gains, firming to a three-week high by adding 0.32% and trading at 4.6030 versus the common currency, lifted by expectations of further rate hikes after November inflation jumped to a two-decade high of 7.7%. The Czech crown was 0.24% higher and trading at 25.400 to the euro. "Further hawkish decisions from (central) banks in the CEE region should support their currencies," PKO Bank wrote in a client note. Stock markets in the region were mixed, with Warsaw"s equities weakening 0.55%. Prague (.PX) was up 0.07%, while Budapest"s index (.BUX) was 0.19% lower. Bucharest (.BETI)up 0.26%. CEE MARKETS SNAPSHOT AT 1025 CET CURRENCIES Latest Previous Daily Change bid close hm in 2021 EURCZK= Czech crown 25.4000 25.4620 +0.24% +3.26% EURHUF= Hungary forint 361.3500 362.5300 +0.33% +0.38% EURPLN= Polish zloty 4.6030 4.6175 +0.32% -0.95% EURRON= Romanian leu 4.9495 4.9465 -0.06% -1.71% EURHRK= Croatian kuna 7.5210 7.5185 -0.03% +0.35% EURRSD= Serbian dinar 117.4800 117.5700 +0.08% +0.08% Note: daily change calculated from 1800 CET Latest Previous Daily Change close change in 2021 .PX Prague (.PX) 1364.10 1363.1600 +0.07% +32.81% .BUX Budapest (.BUX) 51764.15 51860.19 -0.19% +22.93% .WIG20 Warsaw (.WIG20) 2205.06 2217.18 -0.55% +11.14% .BETI Bucharest (.BETI) 12226.77 12195.61 +0.26% +24.69% .SBITOP Ljubljana (.SBITOP) 1220.42 1223.41 -0.24% +35.47% .CRBEX Zagreb (.CRBEX) 1989.77 1991.57 -0.09% +14.40% .BELEX15 Belgrade (.BELEX15) 809.19 810.76 -0.19% +8.09% .SOFIX Sofia (.SOFIX) 613.02 616.80 -0.61% +36.98% Yield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread CZ2YT=RR 2-year 2.8760 0.0680 +360bps +9bps CZ5YT=RR 5-year 2.7160 -0.0140 +332bps +0bps CZ10YT=RR 10-year 2.6180 0.0080 +296bps +2bps Poland PL2YT=RR 2-year 3.0600 0.1480 +378bps +17bps PL5YT=RR 5-year 3.4460 0.1140 +405bps +13bps PL10YT=RR 10-year 3.3380 0.1160 +368bps +13bps FORWARD 3x6 6x9 9x12 3M interbank Czech Rep 4.01 4.05 3.97 3.19 Hungary 4.52 4.64 4.64 3.36 Poland 3.11 3.45 3.45 2.11 Note: FRA quotes are for ask prices ************************************************************** Additional reporting by Alan Charlish in Warsaw; Editing by David Goodman and Shailesh Kuber