PRAGUE, March 31 (Reuters) - There are no foreign exchange imbalances in the Czech economy that would expose it to big refinancing risks, Czech central bank Vice-Governor Miroslav Singer said on Tuesday.
Loan expansion is covered by domestic deposits in the Czech Republic and Czech banks are net creditors towards their west European mother banks, Singer wrote in a response to a Wall Street Journal article on risks in central and eastern Europe.
"Czech banking as a whole is the only net creditor of foreign, mainly parental groups, in the region, with the net credit position of roughly $13 billion," he wrote.
He said the loan to deposit ratio in the country's banking sector was low, at 76 percent.
Household credit in foreign currencies is virtually non-existent and corporate foreign currency loans is equal to slightly above 8 percent of gross domestic product and could be covered by fewer than two months of exports. Banks hold foreign currency deposits worth 7.5 percent of GDP, he added.
Czech policymakers have been trying to make investors differentiate between individual countries in central and eastern Europe according to their economic fundamentals.
The Czech Republic has seen a sharp drop in manufacturing and exports due to a collapse in demand, mainly in Germany, but its banking sector has been stable.
The crown currency has outperformed other units in central Europe, losing just 2.3 percent to date this year, and up 8.4 percent from this year's low to trade at 27.4 to the euro
In comparison, Hungary's forint has lost 14.5 percent and Poland's zloty 11.6 percent.
"There are no major forex imbalances on the balance sheet of the Czech economy, and, given the forex flows are supported by the foreign trade surplus, even the current account imbalance remains very low (currently around 3 percent of GDP)," he wrote.
"The foreign financing needed in this and in the coming years oscillates around $9 billion each year, around quarter of central bank forex reserves," he said. (Reporting by Jan Lopatka; Editing by Ron Askew)