By Nikhil Sharma

May 21 (Reuters) - Emerging market stocks hit a more than seven-month high on Wednesday, regaining momentum after several lukewarm sessions, while focus was also on South Africa, where the currency hovered below a five-month high ahead of a budget meeting.

South Africa's rand ZAR=D3 steadied at $17.92 as the country braced for a third version of the national budget from 1200 GMT, after disagreements between coalition partners scuppered two previous versions.

"South Africa's fiscal outlook takes centre stage today and investors are in a bullish mood that the third attempt to get the revised budget will be approved," strategists at Societe Generale said in a note, highlighting earlier disagreements over VAT hikes.

Meanwhile, President Cyril Ramaphosa will meet with U.S. President Donald Trump in Washington from about 1530 GMT, following Trump's repeated criticism of South Africa.

The Top-40 .JTOPI stock index was 0.8% higher after April inflation came in at 2.8% year on year, below the central bank's 3% to 6% target range.

An index of emerging market currencies .MIEM00000CUS inched up 0.1% as the U.S. dollar dipped for a third session on concerns over the country's debt pile.

Romania's leu RONEUR=R eased 0.1% against the euro, extending losses a day after its central bank kept the doors open to interest rate cuts this year.

The currency has given up most of its gains from earlier this week following a surprise presidential election win for centrist Nicusor Dan over a hard-right rival on Sunday.

In Poland, the zloty PLNEUR=R also edged down 0.1% as recent political uncertainty kept the currency under pressure. The first round of a presidential election on Sunday placed liberal mayor Rafal Trzaskowski against a conservative contender in a June 1 run-off.

Warsaw's main stock index .WIG20 dropped 1.6%, its biggest single-day fall in two weeks, with data showing industrial output increased more than expected last month doing little to boost sentiment. Corporate sector wages rose more than expected in April.

The MSCI emerging markets stocks index .MSCIEF rose 0.7% to 1,175.37 points, extending its gains for the year to 9.2%.

Morgan Stanley slightly raised its forecast for the benchmark to 1,200 points by June 2026. While the brokerage priced in recent trade tariff relief, it warned that the latest tariff-related actions could hurt exporters.

Elsewhere, Israel's international bonds fell after a report that Israel was preparing a strike on Iranian nuclear facilities. Bonds maturing in 2050 US46513JB429=TE fell to their lowest in more than a year.

International pressure on Israel has mounted in recent days amid complaints about the lack of humanitarian aid reaching Gaza as Prime Minister Benjamin Netanyahu's government launches a new military offensive in the enclave.

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(Reporting by Nikhil Sharma; Editing by Kirsten Donovan)

((Nikhil.Sharma@thomsonreuters.com;))