Situation Report on the Monetary Development of Slovakia in October 2008

1. Consumer prices, measured by the harmonized index of consumer prices (HICP), increased by 0.3% in October, as compared with the previous month. The year-on-year growth rate of headline inflation was 4.2%. The core inflation (excl. energy and unprocessed foodstuff prices) reached a year-on-year growth rate of 4.1%.

2. Consumer prices measured by the CPI increased by 0.4% in October, when compared with the previous month. The year-on-year rate of headline inflation was 5.1% and that of core inflation 4.9%.

3. Monetary aggregate M3 (in accordance with the ECB methodology) decreased by SKK 7.6 billion on a month-on-month basis in September, while its year-on-year growth rate decreased to 6.4% in comparison with the August figure.

4. The total volume of claims of monetary financial institutions (MFI) vis-a-vis residents (incl. securities issued by customers and held by the MFI sector, according to the ECB methodology) recorded a month-on-month increase by SKK 11.6 billion in September, while their year-on-year growth slowed by 0.7 percentage points to 14.2%.

5. The average lending rate on new loans to non-financial corporations decreased by 0.16 of a percentage point to 5.80% in September, and that on new loans to households went down by 0.19 of a percentage point to 12.45%. The average deposit rate on new deposits of non-financial corporations decreased by 0.22 of a percentage point to 2.19% in the same period, and that on new deposits of households went up by 0.02 of a percentage point to 1.24%.

6. The central government budget surplus was SKK 7.9 billion as at the end of October.

7. Foreign exchange reserves of the NBS (at the current exchange rate) reached the amount of USD 17.1 billion in October. Their amount at the end of the month represented the equivalent of 2.5 times the average monthly imports of goods and services to Slovakia for the first nine months of 2008. The coverage of the average monthly imports of goods and services (payments for imports of goods and services acquired from banking statistics data) by the official foreign exchange reserves represented the equivalent of 3.3 times the average monthly imports of goods and services to Slovakia for the first nine months of 2008.

8. In October, Narodna banka Slovenska did not make any foreign exchange intervention.

9. According to the preliminary data, the balance of payments current account for September 2008 ended in a deficit of SKK 4.1 billion and the balance of payments current account for January to September ended in a deficit of SKK 84.0 billion, and the trade balance deficit was SKK 2.8 billion.

10. The total sterilization position of the NBS in October, in comparison with September, slightly decreased by less than SKK 0.4 billion to SKK 382.8 billion.

Jana Kovacova
Spokesperson of the NBS

National Bank of Slovakia
Communications Section
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2161,+421-2-5865 2161, +421-2-5787 2166, 421-2-5865 2166
Internet: http://www.nbs.sk

Reproduction is permitted provided that the source is acknowledged.