* Turkey central bank policy rate decision due later

* Hungary's gross average wages rise

* Polish retail sales down

* Stocks subdued, FX flat

June 22 (Reuters) - Emerging market stocks were subdued after Federal Reserve Chair Jerome Powell stuck to his hawkish tone on inflation, while Turkey's lira was stable on expectations of a sharp interest rate hike later on Thursday.

The lira was flat against the dollar, firming slightly from the previous close, after having lost more than 20% of its value against the greenback so far this year.

Turkey's central bank is expected to raise its policy rate sharply on Thursday in a strong signal that re-elected President Tayyip Erdogan has accepted some steps toward economic orthodoxy to address inflation.

While all 18 economists in a Reuters poll predicted a rise in the one-week repo rate, the level remains uncertain given lack of clarity from the central bank on its next move, including the size and pace of the potential hike.

"The hike should be as good as expected and not diverge from market expectations that much, but at the same time, they (the Turkish central bank) have to care about not breaking the economy," said Hakan Aksoy, senior portfolio manager of emerging market debt at Amundi, adding that a hike above 25% was the least likely scenario.

"My guess is they (the Turkish central bank) will start with a dovish hike (of) slightly below 20% and the reaction will be a small depreciation on the currency. But we need to see strong communication as well coming from the central bank saying no matter what, we will control inflation."

MSCI's index of emerging market stocks was flat by 0830 GMT, following three days of sharp declines driven by disappointment over the lack of a stronger stimulus from China to shore up its weak post-pandemic economic growth.

Stock markets in China were closed for a holiday.

Broader emerging market currencies index was flat with the dollar index not far from its five-week low of 102.00, after Powell's testimony.

Powell in his remarks to lawmakers in Washington on Wednesday said the outlook for two further 25 basis point (bps) rate increases are "a pretty good guess" of where the Fed is heading if the economy continues in its current direction.

The South African rand was down 0.1% against the dollar, ahead of U.S. jobless claims data that could give hints at future Fed interest rate hikes.

Elsewhere, Hungary's gross average wages rose by an annual 15.5% in April while Poland's retail sales were down 6.8% on a year-on-year basis in May.

For GRAPHIC on emerging market FX performance in 2023, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2023, see https://tmsnrt.rs/2OusNdX

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For RUSSIAN market report, see (Reporting by Amruta Khandekar and Siddarth S in Bengaluru; Editing by Alexander Smit)