(Repeats story published late on Tuesday)
* Rates to rise if upside CPI risks confirmed
* Concerned over "abnormally low" interest rates
* Says not concerned over demand
* For story on March rate meeting []
By Robert Mueller
BRNO, Czech Republic, April 5 (Reuters) - A rise in Czech
interest rates at the May central bank policy meeting is
possible if upside inflation risks materialise, board member
Pavel Rezabek said on Tuesday.
The bank's staff forecast implies no hike until the end of
this year, but some central bank board members have signalled
they may prefer a tightening earlier.
Rezabek voted for stable rates with the majority on the
seven-member central bank governing board at all rate setting
meetings since the last cut in May 2010.
"Raising rates in May can be realistic if risks on the
pro-inflationary side materialise," Rezabek told Reuters on the
sidelines of a conference in the eastern Czech town of Brno.
He said he was not worried by domestic price pressures but
was concerned over negative real interest rates and the
"abnormally low" nominal policy rate at record low of 0.75
percent.
"In any case, I would see the horizon (of a rate hike)
earlier than at the end of the year. The only question is
whether it will happen by summer, in the summer or in the
autumn."
Rezabek declined to say how he would vote at the next rate
meeting scheduled for May 5.
The development of some external factors could affect the
Czech interest rate path, Rezabek said.
"Raising interest rates can be slower (than expected by
markets), depending on the unclear outlook of the possible
development in Libya and the debt problems of Portugal," he
said.
He also said household confidence, rather than the level of
wages, was a key factor that could stir domestic demand and
drive prices up.
"As soon as people become more certain as for jobs... than
it can be a relatively short time period when (demand) can be
stirred up."
Forward rate agreements <CZKFRA>, a gauge of market
expectations for the future level of interest rates, price in
more than a quarter-point hike in four months' time.
The crown <EURCZK=> shrugged off Rezabek's comments, trading
at 24.435 per euro by 1353 GMT. The unit has firmed by 2.34
percent since the start of the year.
Elsewhere in the region, Polish central bank raised interest
rates by a quarter point to 4 percent on Tuesday, adding to the
first hike in this cycle in January. []
The Hungarian central bank has hiked rates by 75 basis
points between November and January.
The European Central Bank meets on rates on Thursday and is
expected to raise the main refinancing rate from a record low 1
percent. []
Earlier on Tuesday, Governor Miroslav Singer said in a
presentation risks to the bank's forecast were significant, went
in both directions, and were balanced overall. []
(Reporting by Robert Mueller, writing by Jana Mlcochova;
Editing by Ron Askew)
