Czech crown steady as mkt eyes budget, c.bank

PRAGUE, Sept 25 (Reuters) - The Czech crown traded little changed to the euro on Monday as the market eyed government debate over the 2007 draft budget proposal and a central bank policy meeting later in the week.

The currency traded at 28.480 per euro at 1459 GMT <EURCZK=>, from 28.500 late on Thursday.

Dealers said they awaited news on the budget proposal, which cabinet was still debating as of 1500 GMT.

The proposal sees a 119 billion crown ($5.36 billion) deficit, the country's biggest-ever and likely a final signal that the Czechs will not join the euro currency system in 2010.

Citibank said in a note to investors that the budget assumed a strong economic performance, but this would not match expectations if the global slowdown turned out deeper than currently foreseen.

"This would have a negative impact on budget performance. The budget remains one the key risks for the crown and bonds in 2007," Citibank added.

The central bank board is due to discuss interest rates on Sept. 27 and some analysts expect it to tighten policy by 25 basis points. Most in the market, however, still expect the bank to hold off a rate hike until at least October.

The bank last raised rates, by 25 basis points, in July to contain inflation in an economy growing at record 6 percent.

----------------- MARKET SNAPSHOT AT 1459 GMT ----------------- Crown/euro <EURCZK=> last deals at 28.480 (0.07 pct) Crown/dollar <CZK=> at 22.304 bid (-0.29 pct)

5-year yield due Oct 2010 <CZ5YT=RR> 3.60 pct bid (-4 bps) 10-year yield due Jan 2016 <CZ10YT=RR> 3.84 pct bid (-2 bps)

5-yr CZK/EUR mid yield spread <DE114147=> 4 bps (vs 4) 10-yr CZK/EUR mid yield spread <DE113529=> 17 bps (vs 18)

Current levels versus prior domestic close at 1500 GMT ---------------------------------------------------------------

((Reporting by Alan Crosby; Editing by Stephen Nisbet; prague.newsroom@reuters.com; Reuters Messaging: alan.crosby.reuters.com@reuters.net; +420 224 190 477))

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Keywords: MARKETS CZECH CROWN CLOSE