* C.banker can imagine further easing of rates
* ECB, disinflation, depth of crisis main factors
(adds background)
PRAGUE, May 28 (Reuters) - The Czech central bank may cut interest rates further if the economic situation warrants another move, central bank Vice-Governor Miroslav Singer said in remarks prepared for delivery later on Thursday.
Czech borrowing costs are at a record low after a cut earlier this month and three of the seven Czech policymakers have said since then that a further rate reduction was a possibility.
"(A) further rate reduction can be imagined if the ECB cuts rates further, if disinflation strengthens, or if (the) crisis escalates," Singer said in a presentation prepared for delivery at a Moody's conference.
"The next movement in rates is hard to predict," he said.
The once fast-growing central European country slumped in the first quarter, with gross domestic product shrinking by a record 3.4 percent year-on-year, as exports plunged.
Singer said in his paper that all external growth forecasts for 2009 were heading down and recovery was receding.
Developments abroad are key for Czech economy due to its high dependence on exports.
The central bank cut rates by a quarter point on May 7, bringing the two-week repo rate used to drain excess liquidity to a record low of 1.5 percent. The ECB main rate is at 1 percent, after a 25 basis point cut on the same day.
The bank targets consumer annual inflation at 3 percent with a tolerance of 1 percentage point either side of that target, and it plans to switch to a 2 percent target as of 2010.
Inflation was below that target in April, at 1.8 percent year-on-year, and the central bank sees it at 1.7 percent in the third quarter of 2010.
In remarks on the Czech financial system, Singer repeated the country was less vulnerable than others because banks followed a conservative model, and were relatively isolated because they provided loans mainly from primary deposits.
The system has excess liquidity, and banks do not provide foreign currency loans. He also said the ratio of toxic assets was negligible and that unlike their foreign parents, Czech subsidiary banks had suffered hardly any reduction in profits in 2008. (Reporting by Michael Winfrey, writing by Jana Mlcochova, editing by Jan Lopatka and Stephen Nisbet)