UPDATE 1-Czech finance minister dismisses deputy who set off PRIBOR row

PRAGUE, May 20 (Reuters) - Czech Finance Minister Andrej Babis has dismissed his deputy Martin Pros, who set off a dispute with the central bank last month after calling for an investigation into interbank rate settings, because of a "loss of confidence".

The ministry gave no other details in a short statement announcing the dismissal on Wednesday.

Pros triggered a row in April when he wrote to central bank Governor Miroslav Singer to investigate whether the Prague Interbank Offered Rate (PRIBOR), the main benchmark for the country's money market, may have been manipulated to keep interest rates high.

Pros provided his letter to Reuters and other media, prompting the central bank to accuse the deputy of launching an attack on the banking sector's credibility by publicly asking for a probe.

Pros could not be reached for comment on Wednesday. He told news website E15.cz he had been surprised by the dismissal but declined to comment on the reasons, saying there have been multiple issues debated with the minister.

The Czech National Bank (CNB) has not launched any formal investigation into PRIBOR rates, which have remained steady since the row started. It has said it would use standard channels to look into the case.

"The CNB is not aware of any facts about manipulation in the market in the case of PRIBOR rates," it said on Wednesday.

"The CNB has not received any information from Mr. Pros to this day on the basis of which it could possibly start an investigation."

Pros did not accuse any individual or institution of wrongdoing in his April 10 letter. The former corporate and investment banking lawyer told Reuters then that almost no money market funds were offered for PRIBOR rates, showing they were not at the right level.

He also said his questions over PRIBOR were based among others on the fact that if interbank rates were to be derived from the more active euro-crown foreign exchange swaps market, they should be lower.

Pros's letter drew criticism from Babis, who had immediately called on him to provide concrete evidence.

The Czech banking association, which also criticised Pros's actions, has said it had not recorded any indications there may have been unfair practices involved in PRIBOR's calculation. (Reporting by Robert Muller and Jason Hovet; Editing by Larry King/Hugh Lawson)