POLL-Czech rate hike seen more likely as c.banker absent

...(CNB) policymaker at a monthly policy meeting, a Reuters poll showed on Friday.

The CNB's seven-member panel was seen as split on whether a pick-up in inflation to a 7-month high of 2.5 percent in April and buoyant consumption require an immediate tightening of policy.

But Thursday's news that board member Vladimir Tomsik would miss next week's meeting convinced almost all analysts that hawks will now prevail and decide in favour of raising European Union's lowest interest rates to a more than 4-year high.

Eighteen of the 20 CNB watchers predicted a 25 basis point increase in the 2.50 percent main policy repo rate next week. One stuck to the view that such a rate rise is likely in either June or July and another one said it would only come in July.

With an even number of board members present, the way Governor Zdenek Tuma -- widely believed to be a moderate hawk -- casts his ballot will be the deciding factor in case of a tie.

"It will be a very close vote. It is more about psychology than economy," said Raiffeisenbank analyst Ales Michl, who brought forward his forecast of a rate hike to May from June-July after the news of Tomsik's absence.

"We expect three votes in favour of rate stability until at least June ... So Governor Tuma's vote will be decisive and he will probably lean towards raising the repo rate," he added.

In a similar poll published on Wednesday, 14 of the 21 analysts polled forecast a quarter-point hike. Six called for a rise by July and one saw it coming by August [ID:nL23361023].

The economy has been booming, supported by an upturn in the neighbouring EU economies and rapid expansion of credit to households to finance home building and consumer purchases.

Growth is seen sustaining a robust pace 5-6 percent after expanding at a record 6.1 percent clip in both 2005 and 2006.

Two of the six rate-setters present at the previous monthly meeting in April voted for a quarter-point hike against four seeking to keep policy on hold for seventh month running.

The two-week repo rate , the central bank's tool for draining extra liquidity from the open money market, has held flat following increases totalling 75 basis points between October 2005 and September 2006.

FOR DETAILED FORECASTS, DOUBLE-CLICK ON [ID:nL25394000]

Keywords: CZECH ECONOMY/RATES

[PRAGUE/Reuters/Finance.cz]