RPT-Czech crown seen rallying 2 pct over next 12 months

(Repeats story published late on Wednesday)

By Mirka Krufova and Marek Petrus

PRAGUE, Oct 18 (Reuters) - The Czech crown is likely to rally more than 2 percent to new all-time highs of 27.70 per euro <EURCZK=> over the next 12 months, extending a long-term trend fed by rising exports, a Reuters poll showed on Wednesday.

The survey of 23 economists and strategists showed the crown staying around current levels around 28.30 to the euro over the next month, held back by low interest rates and political paralysis which has fanned concerns over a burgeoning budget deficit.

But it was forecast to resume its uprend next year as exports will likely thrive, driven by cars, electronics and other manufactured products made at mostly foreign-owned plants, and help reduce the external deficit.

The poll put the crown at 28.34 to the euro in one month from now, barely changed from late Wednesday's levels.

A record 75 basis point discount between the 2.50 percent Czech policy rate and the euro zone benchmark has taken the shine off investment into Czech securities.

The currency has also suffered from a parliamentary crisis following an inconclusive election in June, which has all but ruined the chances that a strong, reform-minded government will be formed to clean up the deficit-ridden budget.

"We expect concerns about the 2007 budget and continuing political uncertainty to leave the crown underperforming in the near term," said David Ross, analyst at 4Cast consultancy in London, who saw the crown dropping to 28.45 within one month.

But the median forecast showed the crown appreciating to 28.18 per euro in three months, 28.00 in six months and 27.70 in a year from now. A firming crown is widely expected to limit the need for monetary tightening from the Czech central bank.

"The favourable current account outlook is one of the reasons we are cautiously bullish on the crown," said Miroslav Plojhar, chief analyst at Citibank, who had one of the most bullish forecasts, putting the crown at 27.30 within 12 months.

He said strong exports and a rise in European Union development aid inflows would likely narrow the current account deficit next year from this year's estimated 3 percent of gross domestic product (GDP).

"Provided that oil prices stay at their current levels, or even decline further, we can see a more significant current account gap narrowing," he added.

But several foreign banks took a contrarian view, predicting at least a temporary slide to 29 per euro.

"More aggressive rate rises from the ECB will put some pressure on the crown in the next 3-4 months, but this should reverse in 2007, as euro zone and U.S. rates are perceived to have peaked," said Nigel Rendell, FX strategist at Calyon.

He saw the crown reaching 29 per euro in three months from now, before renewed firming takes the currency to 28.40 within 12 months.

((For an overview of consensus forecasts, please double click on [ID:nL18826170]. Individual responses can be accessed through Reuters page <CZ/ECON07>)).

((Writing by Marek Petrus; Editing by Ian Jones; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

Keywords: MARKETS CZECH CROWN