WARSAW, Oct 18 (Reuters) -Prague stocks powered to their highest level in over 16 years on Friday while central Europe's currencies pulled away from weaker levels seen earlier this week.

Stock markets in central Europe, except for Warsaw .WIG20, have climbed 13% to23% so far in 2024 and some - like Budapest .BUX and Bucharest .BETI - have hit all-time highs, followingother bourses in Europe that have reached new peaks.

Prague shares, which lean heavily toward dividend stocks, were led higher by Czech lender Moneta Money Bank MONET.PR, which rose as much as 2.5% and hit an all-time high after management proposed paying an extraordinary dividend.

"Bank (stocks) are supporting the index as some are on their all-time high or close to that," said Milan Vanicek, an analyst at J&T Banka.

"That is because they are doing well and sharing it with their shareholders as we see at Moneta with its extra dividend."

The Czech crown EURCZK= inched up 0.1% against the euro to 25.2010 by 0952 GMT, at its strongest level this month.

The Hungarian forint EURHUF= was also 0.1% higher against the euro at 399.85, trading on the stronger side of the psychologically important level of 400, ahead of the National Bank of Hungary (NBH) rate-setting meeting next Tuesday.

Hungary's central bank is widely expected to pause rate cuts at 6.5% HUINT=ECI despite inflation hitting its 3% target for the first time since 2021 after recent falls in the forint EURHUF= raised fears of a rebound in price growth.

The forint firmed past 400 also in the previous session after Deputy Central Bank Governor Barnabas Virag said that the bank may pause its rate cuts not only this month, but the base rate could remain at its current level for a longer time if warranted by external risks and the inflation outlook. It then slipped back past the psychological level.

"It's already almost certain that a rate cut is not on the table, but we could hear more details on how long the pause in the cutting cycle may be," ING wrote in a note.

In Poland, the zloty EURPLN= firmed 0.2% to 4.3080, making up for some of its losses from a day earlier when it hit its weakest level in over a week, but it continued to trade on the weaker side of the 4.30 psychological level.

"In the coming hours we see potential for stabilization of EURPLN quotes. However, the pair will probably remain slightly above the level of 4.30," Poland's state-owned development bank BGK said in a note.

Reporting by Karol Badohal in Warsaw, Jason Hovet in Prague, Anita Komuves in Budapest; Editing by Shailesh Kuber

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