Slovak crown eases before cbank repo tender

    The Slovak crown was weaker 
versus the euro on Tuesday morning as the market prepared for a 
central bank repo tender that will show whether the unit has 
room to firm in the near term, dealers said. 
    The crown was at 34.260 to the euro  as of 0840 
GMT, compared with 34.210 late on Monday. 
    The crown has firmed in the past week as news of Slovakia's 
economic growth of 9.5 percent in the fourth quarter of 2006 
combined with positive sentiment on European emerging markets. 
    The local unit is now 11 percent above its parity rate in 
the exchange rate mechanism ERM-2, which Slovakia joined in 2005 
as part of the strategy to adopt the euro in 2009. 
    The future trend will depend on whether the central bank 
accepts all bids in the regular repo auction later on Tuesday, 
or whether it rejects some to limit the rise of the crown. 
    "The central bank accepted all bids in last week's repo 
tender, but the crown has firmed by 1 percent since then, which 
could lead to some under-acceptance again," Slovenska Sporitelna 
analysts said in a market note. 
    The central bank rejected part of the bids in five of its 
weekly repo tenders earlier this year to leave excess crown 
liquidity on the market, which made the local currency less 
attractive for hot money and prevented it from jumping too high. 
    "If the central bank takes all bids, the crown might test 
this year's highs," Slovenska Sporitelna said. 
------------------ MARKET SNAPSHOT AT 0840 GMT ----------------- 
Crown/euro  34.260 vs 34.210 on Monday 
Crown/dollar   26.070 vs 26.044 
5-yr govt bond  yield 4.300/4.199 vs 4.353/3.953 pct 
7-yr govt bond  yield 4.270/4.150 vs 4.403/4.203 pct 
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[BRATISLAVA/Reuters/Finance.cz]