Slovak crown drops, eyes rate decision for impetus

    The Slovak crown was weaker 
against the euro on Monday due to capital outflow from central 
Europe, and dealers said they waited for a central bank rate 
meeting on Tuesday to give the unit a near term direction. 
    The crown traded at 34.400 to the euro  as of 1530 
GMT, after 34.360 seen late on Friday. 
    Traders expected the local unit to hover near the current 
levels until the central bank (NBS) delivers its rate ruling 
during the next trading session. 
    ING Bank in Bratislava predicted the NBS to keep the key 
two-week repo rate flat at 4.75 percent, but its analysts could 
also not rule out a 25 basis point cut because of the crown's 
2.5 percent rise since the January rate meeting. 
    The central bank had fought against fast crown firming at 
the end of 2006 and early in 2007, but analysts said recent data 
showing strong productivity growth had made the monetary 
authority more tolerant to stronger crown. 
    "We think that keeping rates on hold could induce a rally to 
34/EUR, and this could still leave the central bank silent," ING 
Bank in Bratislava said in a note. 
------------------ MARKET SNAPSHOT AT 1530 GMT ----------------- 
Crown/euro  at 34.400 vs 34.360 on Friday 
Crown/dollar   26.100 vs 26.163 
5-yr govt bond  yield 4.370/3.970 vs 4.397/4.159 pct 
7-yr govt bond  yield 4.400/4.201 vs 4.270/4.168 pct 
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[BRATISLAVA/Reuters/Finance.cz]