UPDATE 1-Slovak crown hits record high vs euro in thin mkt

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The Slovak crown raced to a record peak of 34.300 against the euro on Friday, helped by low liquidity in pre-holiday trading, dealers said.

At 1220 GMT, the crown traded at 34.385 per euro, compared with Thursday's close of 34.550 .

"People are probably testing the crown barriers. The market is already in a holiday mood, so liquidity is low," said one dealer in Bratislava.

The crown has been the best performing currency in central Europe this year, gaining 10.1 percent against the euro, as investors snapped up emerging assets and Slovakia's economy booked record growth of 9.8 percent in the third quarter.

The currency's strength helped the central bank (NBS) to curb inflation, seen as a crucial challenge for Slovakia's plan to adopt the euro in 2009.

But the bank said last week the crown's recent rise was too fast and not in line with fundamentals, knocking it from the then record high of 34.620.

The bank has remained silent since leaving its key interest rate at 4.75 percent for the third consecutive month earlier this week. The rate stands at a 125 basis-point premium over the euro zone benchmark.

The NBS officials were not immediately available for comment.

The crown trades 10.6 percent above its central parity in the Exchange Rate Mechanism 2 (ERM 2), the precursor for the euro adoption.

[BRATISLAVA/Reuters/Finance.cz]