Slovak crown holds flat before rate verdict

    The Slovak crown was stable 
against the euro on Tuesday morning as the market expected the 
central bank (NJBS) to leave interest rates unchanged at the 
monetary policy meeting later in the day. 
    The crown was quoted at 35.250 to the euro  as of 
0830 GMT, little changed from 35.270 late on Monday. 
    The central bank's policy-making board started its monthly 
meeting at 9 a.m. (0800 GMT). It is expected to announce the 
rate decision before it holds a news conference at 1 p.m. (1200 
GMT). 
    Analysts in a Reuters poll expected the NBS to leave the key 
two-week repo rate unchanged at 4.75 percent, for the fourth 
month in a row, after a rising crown has tightened monetary 
conditions and helped improve inflation outlook. 
    An NBS board member Ludovit Odor said last week the monetary 
policy tightening drive, during which the bank had raised rates 
by a total of 175 basis points in 2006, appeared to have ended 
and that the debate would now be about possible policy easing. 
    Market watchers did not expect the crown to show any major 
reaction if the NBS left the rates on hold. 
    "Our expectation for flat rates with a dovish statement 
should leave the crown unshaken, while global FX moves and 
volatility are likely to play a prominent role again this week," 
ING Bank analysts in Bratislava said in a market report. 
    Tatra Banka trader Boris Somorovsky said the crown could 
ease towards 35.500 per euro if the bank surprised the market 
with a rate cut. 
    The NBS has been trying to cap the rise of the crown for 
over a month, but analysts said it would be too early now to cut 
the official rates as Slovakia has not yet ensures it will meet 
the inflation condition for adopting the euro in 2009 as 
planned. 
----------------- MARKET SNAPSHOT AT 0800 GMT ----------------- 
 Crown/euro  at 35.250 vs 35.270 on Monday (+0.09 pct) 
 Crown/dollar   27.200 vs 27.234 (+0.13 pct) 
5-yr govt bond  yield 4.379/4.979 vs 4.342/4.121 pct 
7-yr govt bond  yield 4.439/4.238 vs 4.396/4.176 pct 
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[BRATISLAVA/Reuters/Finance.cz]