UPDATE 2-Czech's Lizal: market is "completely overbought" in crowns

(Adds Swiss scenario comment, more on crown)

VIENNA, Jan 18 (Reuters) - The Czech National Bank still believes the right time to lift its cap on the crown is the middle of the year, board member Lubomir Lizal said on Wednesday, adding that investors had overbought the currency.

The central bank has kept the crown weak since late 2013 but is close to ending this policy now that the economy is on solid ground and inflation is back at the bank’s 2 percent target.

The bank has repeatedly said it will not lift the cap on the currency before the second quarter. It has said it is likely to do this around the middle of this year.

A Reuters poll last week found 13 of 16 analysts expected the bank to scrap the cap in the second quarter.

“Under the current situation we still believe the proper time for the exit is around the middle of this year,” said Lizal, who is due to leave the bank next month after one more policy meeting.

“The market is completely overbought in Czech koruna (crowns). People are too much on the side of believing in the unexpected Swiss scenario,” he told a Euromoney conference in Vienna.

The Swiss National Bank ended its policy of capping the franc out of the blue in January 2015, stunning the markets and sending the currency soaring. The Czech bank has said it would not end its own cap in this way.

Investors have increasingly piled into the market betting on when the bank will lift the cap and how much the currency will strengthen once it trades freely again.

Crown forward markets have firmed in recent weeks, with a six-month forward quoted at 26.72 per euro on Wednesday, while the spot market has clung to the bank’s 27 per euro cap.

While analysts see the crown as undervalued by 5-10 percent, many say the inflows are making it less likely the currency will jump much, or at all, immediately after the cap ends, since there will be a lack of counterparties - meaning investors may have to wait to profit.

Data this month indicated the central bank has intervened at its heaviest levels since introducing the cap regime. Central bank balance sheets showed receivables from abroad jumped by 189.6 billion crowns, or 7 billion euros, in the first 10 days of January.

The receivables can be influenced by other factors but have been a good guide to intervention activity. Official January intervention volumes data will be released in March.

Much of the inflows in recent months have gone into bonds, depressing short-term bond yields to some of the lowest anywhere. (Reporting by Francois Murphy; Writing by Jason Hovet; Editing by Richard Lough)