Czech crown seen steady after interest rate hike

PRAGUE, Sept 29 (Reuters) - The Czech crown opened slightly lower to the euro on Friday but is seen holding steady after the central bank tightened monetary policy on Wednesday.

At 0728 GMT the currency traded at 28.385 <EURCZK=>, down 0.11 percent from late on Wednesday. Markets were closed on Thursday for a national holiday.

The central bank hiked interest rates by 25 basis points on Wednesday, a move which surprised many analysts though the money market had priced in a move just ahead of time.

"The crown barely reacted to the interest rate hike, the money market had already priced it in," said Jan Vejmelek of Komercni Banka.

"We believe that the technical support level of 28.30 will hold for today (Friday)."

The hike brings the key two-week repo rate to 2.50 percent.

The central bank said that it made the move as risks to its economic forecasts were slightly pro-inflationary.

----------------- MARKET SNAPSHOT AT 0728 GMT -----------------

Crown/euro <EURCZK=> last deals at 28.385 (-0.11 pct) Crown/dollar <CZK=> at 22.390 bid (-0.39 pct)

5-year yield due Oct 2010 <CZ5YT=RR> 3.66 pct bid (3 bps) 10-year yield due Jan 2016 <CZ10YT=RR> 3.85 pct bid (0 bps)

5-yr CZK/EUR mid yield spread <DE114147=> 5 bps (vs 1) 10-yr CZK/EUR mid yield spread <DE113529=> 18 bps (vs 16)

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

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

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Keywords: MARKETS CZECH CROWN OPEN