Rationale behind the decision of the Bank Board of the NBS on the set levels of the NBS interest rates

The Bank Board of the NBS discussed and approved the Situation Report on Monetary Development in the Slovak Republic in October and concluded that the inflation development was slower in accordance with the NBS´ s expectations, affected also by the base effect of last year´ s considerable increase in foodstuffs prices. The development of the other macroeconomic indicators did not record any substantial change and industrial production showed repeated year-on-year growth. Considering the last decision of the NBS, upon which the set levels of interest rates decreased, the key interest rate achieves a comparable level with the euro area. During the discussion, the following factors were considered. The inflation development measured by the Index of Consumer Prices was in line with the NBS´ s expectations. The slowdown of inflation growth rate was reported, as had been assumed, by the influence of a considerable slowdown in unprocessed foodstuffs prices, the month-on-month growth of which was substantially lower when compared with last year. The prices of fuels had the same effect. On the contrary, other prices of energy, as well as that of services, had a pro-growth influence, mainly because of the catching-up, in the current period, of the costs of transport and catering services. Monthly indicators of the economic development were in line with current development when the development in the proceeds of the selected branches reported a slightly higher year-on-year growth in September. Industrial production showed growth when compared with the previous month. The trade balance development was also favourable, reporting a surplus, probably also by development in the prices of mineral resources. The Statistical Office of the SR published a flash estimate of the economy development, within which a slightly slower economic growth was reported when compared with the previous quarters of the yea. This is in line with the NBS´ s estimates and is connected with the base effect of the start-up of transport production in the last year. Despite this fact, the economy of the SR is still able to produce job opportunities which was shown in the further year-on-year growth of employment. Based on the latest data, the Bank Board of the NBS characterized the overall macroeconomic and monetary development as acceptable which is in line with the central bank assumptions. During the Bank Board discussion on the set levels of the NBS interest rates, there was no proposal on changing the interest rates submitting by members present.

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

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