* Rate stability good for economy -c.banker Rezabek
* Low rates dangerous -c.banker Zamrazilova
* Rezabek says weaker crown good for economy
(Wraps comments, adds background)
PRAGUE, Dec 1 (Reuters) - Czech interest rates are too low
and pose a long-term risk but are unlikely to move higher any
time soon, two central bankers said on Wednesday.
The seven-strong central bank board has kept interest rates
on hold at a record low of 0.75 percent since May after reducing
them by three percentage points from mid-2008.
Hungary was the first central European country to start
reversing the crisis-driven monetary loosening seen over the
past two years, surprising markets with a rate hike on Monday.
Poland is expected to follow in the first quarter next year,
while analysts see a Czech rate rise in the second half of 2011.
The Czech central bank's latest forecast showed weaker
economic output next year, implying the expected hike is likely
to come towards the end of next year. []
Board member Pavel Rezabek said on Wednesday that rates were
too low -- echoing comments from fellow policymaker Eva
Zamrazilova, who has been alone in voting for an increase this
year -- but said rate stability was an anchor for the economy.
"I also think rates are extremely, too low, I would be
calmer if they were at a higher level," Rezabek said.
"On the other hand I feel the economy needs an anchor, and I
consider the stability of rates to provide that."
He told reporters there were no inflationary pressures in
the economy now and that that any rate rise would be to counter
risks from historically low rates rather than to tame inflation.
The crown currency <EURCZK=> has helped keep inflation in
check, leading gains among central European currencies this year
with a 5.5 percent rise. But it has lost 2.5 percent to trade at
24.96 to the euro since hitting a 2010 high on Nov. 4.
Rezabek said he was satisfied the currency's rally had eased
and that the weaker crown gave the economy room to breathe.
The Czech central bank meet for the final time this year on
Dec. 22. Zamrazilova, who has voted for a 25 basis point rise at
the last two meetings, was quoted as saying she did not expect a
change of rates then.
"With regard to interest rates, I believe that most board
members will wait until the big situation report, the first
report in 2011. This will once again show in detail where the
development should be going," Zamrazilova was quoted as saying
by Mediafax news agency on Wednesday.
"I was the only bank board member that voted for increasing
rates because I consider low rates to be extremely dangerous."
(Reporting by Jana Mlcochova and Roman Gazdik, writing by Jason
Hovet, editing by Catherine Evans)
