Slovak crown pares losses, ignores rate decision

...will meet inflation goals to qualify for euro adoption in 2009, dealers said.

The crown fell as far as 33.980 against the euro at midday after a Reuters report on the European Central Bank's memo.

The memo said Slovaks should not bet on automatic fulfillment of the inflation criterion even if its inflation rate is below the reference value for the euro zone entry.

"In other words the ECB just wanted to warn Slovakia against excessive optimism and confidence over the euro entry and more or less suggested to the government that it should keep a tight fiscal stance," Danske Bank wrote in a market note.

The crown stood at 33.890 per euro as of 1550 GMT, slightly softer from 33.825 late on Monday.

The crown showed no reaction to the central bank's (NBS) decision to keep interest rates on hold, which was fully in line with market expectations. -----------------MARKET SNAPSHOT AT 1550 GMT------------------- Crown/Euro 33.890 vs 33.825 on Tuesday (-0.19 pct) Crown/Dollar 25.175 vs 25.148 (-0.11 pct) 5-yr govt bond yield 4.533/4.233 vs 4.677/4.499 pct 7-yr govt bond yield 4.749/4.549 vs 4.796/4.654 pct --------------------------------------------------------------