* Mainland China, Hong Kong shares drop after long weekend

* South African rand gains as unity government talks continue

* Slowing Czech inflation keeps rate cut path clear

* IMF reaches staff level agreement with Kenya

* FX down 0.3%, stocks off 0.1%

June 11 (Reuters) - Emerging market equities dipped on Tuesday, weighed down by Chinese stocks as investors grew increasingly wary of the U.S. rate outlook ahead of this week's Federal Reserve's policy decision, while also monitoring EM political developments.

The MSCI index for EM equities was 0.3% lower at 0900 GMT, with Hong Kong and Mainland China stocks falling to multi-month lows after a long weekend as sentiment was bruised by last week's hot U.S. jobs data that saw a dramatic paring of U.S. rate cut bets.

The currencies gauge edged 0.1% lower, set for its third day of losses.

The Federal Reserve's June interest rate decision comes on Wednesday, with a series of U.S. inflation reports also scheduled this week.

Meanwhile, data showed Czech inflation slowed more than expected in May, following a surprise jump to the top end of the central bank's tolerance band the previous month, likely keeping the path clear for further interest rate cuts.

The crown was down 0.5% against the dollar, with other Central and Eastern European currencies also under pressure for a third straight session.

A Reuters poll showed Taiwan is expected to keep its policy rate unchanged this week and to stay the course until late next year. Taiwan's dollar was down 0.4%.

Minutes showed most Bank of Korea board members see the need to be cautious about easing policy at their May meeting.

Investor focus has also been on the elections in a number of major emerging markets.

The South African rand gained against the dollar as political parties continued talks to try and form a government of national unity ahead of Friday's first sitting of lawmakers.

The Mexican peso remained under pressure, down 1.1% against the dollar, after President-elect Claudia Sheinbaum said on Monday she would encourage broad discussions over proposed constitutional reforms, including a judicial overhaul, before the next congressional session kicks off.

"I think people forget a bit that this (peso weakness) also coincides with investors having made a lot of money being long on the peso...it was likely the biggest consensus long in EMs currencies for quite a while," said Michael Bolliger, chief investment officer, EMs, UBS Global Wealth Management.

Kenya reached a staff level agreement with the International Monetary Fund, paving the way for the disbursement of about $976 million.

The shilling was slightly up, with dollar inflows from tea, coffee and horticulture exports expected to strengthen it in the coming days.

HIGHLIGHTS:

** Bank Indonesia to use all monetary instruments to stabilise rupiah- deputy governor

** Philippine cbank says Q3 interest rate cut still on table

** India PM Modi's government to stick to deficit target despite poll setback- source

(Reporting by Ankika Biswas in Bengaluru; Editing by Kirsten Donovan)