UPDATE 1-Steady rates likely over longer term-Czech cbanker

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Czech interest rates are likely to hold steady over a longer period of time, but could move in either direction due to unusual uncertainty over the economic outlook, central bank Vice-Governor Miroslav Singer said on Friday.

"In essence, I can imagine that some kind of a shock will force us to react with interest rates and that three months later, another one (shock) will make us react in the opposite direction," Singer told journalists on the sidelines of a conference on European integration.

"On average, the uncertainties lead me to presume that these shocks may offset each other, but I am not sure about that."

The Czech central bank board voted unanimously to hold interest rates at its Jan. 25 policy meeting.

But some board members said a future rate cut could not be ruled out and that there were numerous risks to the bank's new inflation forecast in both directions and that the exchange rate of the crown was also a risk in both directions.

Singer said the differential between Czech interest rates and those of the euro zone and other countries appeared to be helping weaken the crown currency, which has dropped from all-time highs seen in late December and in early January.

The main two-week repo rate currently stands at 2.5 percent, the lowest level in the EU.

[PRAGUE/Reuters/Finance.cz]