Situation report on the monetary development of Slovakia in July 2008

1. Consumer prices, measured by the harmonized index of consumer prices (HICP), as compared with the previous month, stagnated in July. The year-on-year growth rate of headline inflation was 4.4%. The core inflation (excl. energy and unprocessed foodstuffs prices) reached a year-on-year growth rate 4.2%.

2. Consumer prices measured by the CPI increased by 0.1% in July, when compared with the previous month. The year-on-year rate of headline inflation was 4.8% and that of core inflation 5.1%.

3. Monetary aggregate M3 (in accordance with the ECB methodology) decreased by SKK 13.5 billion on a month-on-month basis in June, while its year-on-year growth rate decreased to 6.6% in comparison with the May 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 in June a month-on-month increase by SKK 21.20 billion, while their year-on-year growth accelerated by 0.2 of a percentage point to 14.2%.

5. The average lending rate on new loans to non-financial corporations increased by 0.20 of a percentage point to 5.95% in June, and that on new loans to households went down by 0.08 of a percentage point to 11.89%. The average lending rate on new deposits of non-financial corporations increased by 0.26 of a percentage point to 2.59% in the same period, and that on new deposits of households went up by 0.02 of a percentage point to 1.14%.

6. The central government budget deficit was SKK 0.6 billion as at the end of July.

7. Foreign exchange reserves of the NBS (at the current exchange rate) reached the amount of USD 19.8 billion in July. Their amount at the end of the month represented the equivalent of 2.9 times the average monthly imports of goods and services to Slovakia for the first six months in 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 as at the end of June the equivalent of 3.9 times the average monthly imports of goods and services to Slovakia for the first six months in 2008.

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

9. According to the preliminary data, the balance of payments current account for May 2008 ended in a deficit of SKK 8.7 billion and the capital and financial account of the balance of payments for the same period ended in a surplus of SKK 3.6 billion. The balance of payments current account for January to June ended in a deficit of SKK 47.6 billion and the trade balance deficit was SKK 1.7 billion. sk.

10. The total sterilization position of the NBS in July, in comparison with June, increased nearly by SKK 2.6 billion to SKK 377.1 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
http://www.nbs.sk

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