* Continuing dollar slide fuels forint, zloty rally * Sept CPI jump keeps lid on Romanian fx, bond prices * Czech bond auction seen drawing "reasonable demand"-traders By Sandor Peto and Luiza Ilie BUDAPEST/BUCHAREST, Oct 11 (Reuters) - The leu bucked a Central European currency rally on Wednesday due to worries over a bigger-than-expected jump in Romania's inflation and tension over a planned government reshuffle.
The region's most liquid units, the zloty and the forint, firmed 0.3 and 0.2 percent, respectively, against the euro.
They have been strengthened in the past two days by money flowing out of the weakening dollar.
The leu, after a rise earlier this month amid a liquidity squeeze in Romanian interbank markets, has missed that rally.
Prime Minister Mihai Tudose announced on Monday that he considered a government reshuffle due to corruption allegations against three ministers, in a move that could create tension within the ruling Social Democrat party.
On top of political worries, September figures released early on Wednesday showed a continuing rise in Romanian annual inflation, to a higher-than expected 1.8 percent from 1.2 percent in August.
The leu eased a tad to 4.587.
Romania's 3-year bonds traded at a steady 2.29 percent yields, even though Tuesday's one billion euros eurobond issue eased the government's financing need, while Polish and Hungarian yields fell 4-5 basis points across the curve.
Analysts and the Romanian central bank (NBR) are now likely to revise their year-end inflation forecasts upwards.
Ionut Dumitru, chief economist at Raiffeisen Bank in Bucharest, said his already raised estimate of 2.4 percent "has now probably become optimistic." "The central bank will tighten (policies) sooner rather than later, probably," he said.
"In November it will probably further reduce the corridor between its lending and deposit facilities, which I still see as a tightening. Benchmark interest rate tightening will come next year," Dumitru added.
An expected rise in government spending later this year could help ease the liquidity squeeze, for which the government has criticised the NBR, but could increase worries over a rise in inflation pressure and the budget deficit.
The bank, fearing speculative capital flows, has said signals from the European Central Bank and the Polish central bank (NBP) could influence local decisions.
While the ECB hesitates, the NBP is unlikely to lift rates any time soon, though a surge in forward rate agreements this month priced in a start of rate hikes within 12 months. Most analysts have projected a later rise.