PREVIEW-Slovak central bank seen easing policy in April

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* When: Tuesday, April 24

* Interest rates seen cut by 25 basis points

By Martin Santa

BRATISLAVA, April 19 (Reuters) - The Slovak central bank (NBS) will probably cut interest rates next week as the strong crown has tightened monetary conditions and recent inflation data confirmed favourable price growth outlook, analysts said.

Eight out of 11 analysts in a Reuters survey predicted the NBS would cut the key-two week repo rate by 25 basis points to 4.25 percent at the monthly policy meeting on April 24, following a similar policy easing last month.

"March inflation data were favourable, showing no obstacles to an imminent rate cut," said Lucia Steklacova, a senior analyst at ING Bank Bratislava. "In light of this, a 25 basis point cut will not surprise the market at all."

Annual EU-norm inflation, the main yardstick for assessing Slovakia's preparation to adopt the euro in 2009 as planned, was 2.1 percent in March, near the 2.0 percent record low seen in February.

"Inflation is fairly low," said Nordea analyst Anders Svendsen. "Thus, the need for a strong crown to get inflation below the Maastricht criteria by next spring is less pronounced, and hence there is room for manoeuvre."

The crown has risen 2.3 percent in the past month, following the revaluation of its peg to the euro in the exchange rate mechanism ERM-2.

The central bank has repeatedly intervened on the foreign exchange market to weaken the local unit after it hit a record high of 32.710 per euro on March 19.

The crown has lost some ground in the past few days, and traded at 33.540 per euro late on Thursday, but it is still up 3 percent versus the euro since the start of the year.

Apart from interventions, the NBS has also kept the money market with excess crown liquidity to drive short-term interest rates down and discourage hot money inflows.

"Market interest rates are deeply under the official repo rate, and this is not a normal situation," said Miroslav Plojhar, the Chief Economist at Citigroup Prague, who predicts a 25 basis point rate cut in April.

The central bank will also release its updated quarterly macro-economic prognosis, which should confirm that Slovakia is on track to meet the inflation criterion for euro zone entry, analysts said.

(For accompanying table pls click on [ID:nL19264144])

Keywords: SLOVAKIA RATES/PREVIEW