The macroeconomic development in Slovakia does not significantly differ from the central bank's prognoses, which is the main reason, why the bank decided to keep interest rates on hold also in September. The National Bank of Slovakia's (NBS) Governor Ivan Sramko told a press conference after the Bank Board meeting on Tuesday that inflation has been developing according to expectations, trade balance deficit has been decreasing year-on-year as predicted, and also data on economic growth have confirmed its healthy structure. "The NBS Bank Board has concluded that present macroeconomic development was in line with expectations and decided to keep interest rates at current level. Within the discussion in the NBS Bank Board on the existing level of interest rates, none of the present members suggested a change," Mr. Sramko added.
Nevertheless, the central bank is to focus on prices of food and services which reported accelerated growth in August. "Depending on continuation of such development, mainly with regard to food prices as a result of global demand for some commodities, one of the identified pro-inflation risks could materialize, which will be subject to an analysis in the quarterly prediction next month," the NBS governor commented. He added that growing prices of food and services are also one of the factors why the central bank decided not to lower interest rates, which would mean equalizing them with the interest rates level in the eurozone. "These growths do not signal, as of now, a need to change monetary policy. Our inflation estimates, which we will be presented next month, can demonstrate them as a serious signal and that is why I think there is no reason to lower rates, as this risk exists." Mr. Sramko added.
The Bank Board of the National Bank of Slovakia (NBS) decided at its meeting on Tuesday to keep the two-week sterilization repo-rate at 4.25 percent p.a. The one-day sterilization repo rate remains at 2.25 percent p.a. and the one-day refinancing rate at 5.75 percent p.a. The central bank has kept interest rates on hold since April of this year. The central bank in May interrupted a two-month series of interest-rate cuts, when key interest rates decreased by 25 basis points in March and in April. In 2006, the NBS changed key interest rates four times. The last change last year came a year ago in September when the central bank increased key interest rates 25 basis points.
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