UPDATE 2-Czech c.bank leaves rates on hold, stability ahead

* Borrowing costs kept at record lows as expected

* Bank says risks roughly balanced, rates seen flat for now

* Markets unmoved

(Adds comments from news conference)

By Jana Mlcochova and Michael Winfrey

PRAGUE, June 23 (Reuters) - The Czech central bank left interest rates unchanged on Wednesday as expected and said they could stay stable for the near future as the country creeps through an export-driven recovery marked by weak price growth.

Rate-setters left the main two-week repo rate at 0.75 percent, below the euro zone's 1 percent benchmark rate. All 17 analysts in a Reuters poll had said the bank would hold fire after a series of cuts that ended in May.

They expect the next move to be a 25 basis point hike. Five expect the rise during 2010, while nine see it in 2011.

Bank Governor Zdenek Tuma, presiding over his last meeting before he quits at the end of the month, said risks were roughly balanced between the anti-inflationary impact of developments in the euro zone and price pressure tied to a crown currency that is weaker than the bank's forecast.

"It is hard to predict the next development in interest rates. It depends on the development of risks," Tuma told a news conference.

"At the moment they are not particularly significant. So for the nearest term, rate stability is probably most likely, but it is impossible to predict the future development."

Markets were unmoved after the widely expected decision, with the crown unchanged at 25.725 to the euro, up 0.2 percent on the day. Bonds and money market rates were also unchanged though Czech 1-year interest rate swaps fell to 1.27/35 pct from 1.30/36 seen before the news conference.

Forward rate agreements , contracts betting on future changes in interest rates, price in no change for the rest of the year and about an 80 percent chance of a quarter point hike in the first three months of 2011.

Czech growth has been harder hit than neighbouring Poland in the global financial crisis, but they have easily avoided the sort of debt, currency or fiscal crisis that drove some others in eastern Europe to seek IMF aid.

Hungary's central bank also held rates stable on Monday, at a record low 5.25 percent, and gave no signal about the possibility of further rate cuts. [ID:nLDE65K0MM] Poland is expected to keep rates unchanged at 3.5 percent next week.

MICROSCOPIC CHANGE

Tuma said the board saw the balance of risks to its forecasts to be slightly anti-inflationary, but he said the tilt was so "microscopic" that saying the risk were balanced was a better formulation.

Some analysts said latest developments tilted the balance of risks to the bank's inflation forecast to the upside, though not enough to hike.

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"Since the last central bank meeting, a string of data has developed in a pro-inflationary direction in relation to the central bank's assumptions," said Raiffeisen Bank analyst Michal Brozka.

"On the other hand, chances for fiscal austerity have risen, which is an argument to keep rates low for a longer period of time."

Inflation in May came in 0.3 percentage points above the bank's forecast. But adjusted readings excluding fuels show price growth driven by demand was negative. Import prices, too, had a disinflationary effect, the bank said this month.

Unemployment fell below 9 percent for the first time in half a year, possibly helping household consumption, which surprised on the upside, according to first quarter GDP data.

Vice Governor Miroslav Singer takes over the governor's post as of July 1. [ID:nLDE65H16O] (Editing by Patrick Graham)