Slovak crown weakens, mkt prepares for rate cut

...profits and prepared positions for an expected 
interest rate cut, dealers said. 
    The crown  was at 33.575 to the euro as of 1525 
GMT, compared with 33.375 seen late on Tuesday. 
    The crown had a volatile week, first jumping on revaluation 
of its parity rate in the ERM-2 exchange rate mechanism, then 
erasing part of the gains due to central bank interventions to 
stop the rally. 
    The Slovak unit rose by over 3 percent after the ERM-2 
parity shift, hitting a record high of 32.710 per euro on 
Monday. 
    The central bank then intervened to weaken its currency, 
saying the new parity rate of 35.4424 per euro was near the 
equilibrium level justified by economic fundamentals. 
    The market now expects the central bank (NBS) to cut 
interest rates at the monthly monetary policy meeting on March 
27, according to a Reuters poll of analysts. 
    "The Slovak crown could come under pressure next week, 
because of the NBS's meeting and possible rate reduction by as 
much as 50 basis points," said Komercni Banka analysts. 
    Some market watchers, however, said the rate decision would 
be a close call and that the central bank might keep the main 
two-week repo rate unchanged at 4.75 percent because of 
persisting inflation risks from energy prices. 
------------------ MARKET SNAPSHOT AT 1525 GMT ----------------- 
Crown/euro  at 33.575 vs 33.370 on Thursday 
Crown/dollar   at 25.242 vs 24.955 
5-yr govt bond  yield 4.242/4.002 pct vs 4.227/4.007 
7-yr govt bond  yield 4.394/4.194 pct vs 4.209/3.988 
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