Situation Report on the Monetary Development of Slovakia in December 2006 - Summary

1. Consumer prices, measured by the harmonized index of consumer prices (HICP), increased by 0.1% in December, as compared with the previous month. The year-on-year growth rate of headline inflation was 3.7%. The year-on-year core inflation growth rate (excl. energy and unprocessed foodstuff prices) was 2.5%.

2. Consumer prices measured by the CPI remained unchanged in December, when compared with the previous month. The year-on-year rate of headline inflation was 4.2% and that of core inflation 2.7%.

3. Monetary aggregate M3 (in accordance with the ECB methodology) increased by SKK 20 billion on a month-on-month basis in November while its year-on-year growth rate increased to 16.7% in comparison with the October figure.

4. The total volume of claims of monetary financial institutions (MFI) vis-à-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 6.7 billion in November, while their year-on-year growth slowed by 0.5 of a percentage point to 13.8%

5. The average lending rate on new loans to non-financial corporations decreased by 0.36 of a  percentage point to 6.24% in November, and that on new loans to households increased by 0.25 of a  percentage point to 12.82%. The average deposit rate on new deposits of non-financial corporations decreased by 0.18 of a percentage point to 2.69% in the same period, and that on new deposits of households went down by 0.08 of a percentage point to 1.13%.

6. The central government budget deficit was SKK 31.7 billion as at the end of December.

7. Foreign exchange reserves of the NBS (at the current exchange rate) reached the amount of USD 13.4 billion in December. Their amount at the end of the month represented the equivalent of 3.3 times the average monthly imports of goods and services to Slovakia for the period January to November 2006. The coverage of the average monthly imports of goods and services (imports of goods and services acquired from banking statistics data) by the official foreign exchange reserves represented as at the end of December the equivalent of 4.2 times the average monthly imports of goods and services to Slovakia for the period January to November 2006.

8.Narodna banka Slovenska intervened against the strengthening of the Slovak koruna in December and sold EUR 495 million through direct foreign exchange interventions

9. According to the preliminary data, the balance of payments current account for January to October 2006 ended in a deficit of SKK 113.9 billion and the capital and financial account of the balance of payments for the same period ended in a deficit of SKK 1.3 billion. The balance of payments current account for January to November 2006 ended in a deficit of SKK 121.3 billion and the trade balance deficit was SKK 80.2 billion.

10. The total average sterilization position of the NBS against the banking sector was SKK 279.73 billion in December, and it decreased by SKK 6.6 billion against the November figure.

Igor Barat
Spokesman of the NBS

National Bank of Slovakia
Public Relations Department, Press 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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