Czech cbankers meet, markets expect no rate change

...expectations they would hold credit costs steady for a seventh consecutive month thanks to low inflation.

The main two-week repo rate has held at 2.50 percent, the lowest level in the European Union and now a record 125 basis points below the euro zone equivalent, as a firm crown has kept inflation pressures at bay despite robust economic growth.

A CNB spokeswoman said CNB rate-setters convened at 9 a.m. (0700 GMT) for the presentation of a monthly report on monetary and economic developments.

The bank said earlier board member Mojmir Hampl would be absent and only six policymakers would attend the meeting.

The CNB has no set time for a policy announcement but it usually publishes its rate decisions some time after 12 p.m. (1000 GMT).

It called a news conference for 3:30 p.m. (1330 GMT), where it is expected to release a quarterly update to its inflation and economic growth projections for up to 18 months ahead.

Some analysts have said news conference statements and the updated forecasts could send modestly hawkish signals to the markets and set the stage for a near-term interest rate rise.

Investors have been generally betting the CNB will resume policy tightening by July to pre-empt inflation in the booming economy, following 75 basis points worth of rate hikes between October 2005 and September 2006.