Situation Report on the Monetary Development of Slovakia in December 2007

1. Consumer prices, measured by the harmonized index of consumer prices (HICP), increased by 0.3% in December, as compared with the previous month. The year-on-year growth rate of headline inflation was 2.5%. The core inflation year-on-year growth rate (excl. energy and unprocessed foodstuffs prices) was 2.8%.

2. Consumer prices measured by the CPI increased by 0.3% in December, when compared with the previous month. The year-on-year rate of headline inflation was 3.4% and that of core inflation 4.2%.

3. Monetary aggregate M3 (in accordance with the ECB methodology) increased by SKK 1.4 billion on a month-on-month basis in November. while its year-on-year growth rate decreased to 12.3% in comparison with the October 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 16.6 billion, while their year-on-year growth accelerated by 1 of a percentage point to 17.2%.

5. The average lending rate on new loans to non-financial corporations decreased by 0.3 percentage point to 5.71% in November, and that on new loans to households increased by 0.11 percentage point to 12.15%. The average deposit rate on new deposits of non-financial corporations decreased by 0.17 of a percentage point to 2.19% in the same period, and that on new deposits of households went down by 0.02 of a percentage point to 1.01%.

6. The central government budget deficit was SKK 23.5 billion as at the end of December.

7. Foreign exchange reserves of the NBS (at the current exchange rate) reached the amount of USD 19.0 billion in December. Their amount at the end of the month represented the equivalent of 3.5 times the average monthly imports of goods and services to Slovakia for the first eleven months in 2007. 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 as at the end of November the equivalent of 4.6 times the average monthly imports of goods and services to Slovakia for the period January to November 2007.

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

9. According to the preliminary data, the balance of payments current account for January to October 2007 ended in a deficit of SKK 74.4 billion and the capital and financial account of the balance of payments for the same period ended in a deficit of SKK 156.4 billion. The balance of payments current account for January to November 2006 ended in a deficit of SKK 80.1 billion and the trade balance deficit was SKK 11.4 billion. sk.

10. The total average daily sterilization position of the NBS in December, in comparison with November, decreased by SKK 7.7 billion to SKK 368.3 billion.

Jana Kováčová
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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