Situation Report on the Monetary Development of Slovakia in May 2008

1. Consumer prices, measured by the harmonized index of consumer prices (HICP), increased by 0.4% in May, as compared with the previous month. The year-on-year growth rate of headline inflation was 4.0%. The core inflation year-on-year growth rate (excl. energy and unprocessed foodstuffs prices) was 4.0%.

2. Consumer prices measured by the CPI increased by 0.3% in May, when compared with the previous month. The year-on-year rate of headline inflation was 4.6% and that of core inflation 4.8%.

3. The real gross domestic product increased by 8.7% in the first quarter of 2008.

4. Monetary aggregate M3 (in accordance with the ECB methodology) increased by SKK 6.2 billion on a month-on-month basis in April, while its year-on-year growth rate decreased to 10.2% in comparison with the March figure.

5. The total volume of claims of monetary financial institutions (MFI) vis-r-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 13.6 billion in April, while their year-on-year growth accelerated by 0.1 of a percentage point to 17.0%.

6. The average lending rate on new loans to non-financial corporations decreased by 0.01 percentage point to 5.69% in April, and that on new loans to households decreased by 0.45 percentage points to 11.82%. The average lending rate on new deposits of non-financial corporations increased by 0.23 of a percentage point to 2.13% in the same period, and that on new deposits of households went down by 0.02 of a percentage point to 1.16%.

7. The central government budget deficit was SKK 3.1 billion as at the end of May.

8. Foreign exchange reserves of the NBS (at the current exchange rate) reached the amount of USD 19.7 billion in May. Their amount at the end of the month represented the equivalent of 3.0 times the average monthly imports of goods and services to Slovakia for the first four 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 April the equivalent of 4.0 times the average monthly imports of goods and services to Slovakia for the first four months in 2008.

9. In April, Narodna banka Slovenska did not make any foreign exchange intervention.

10. According to the preliminary data, the balance of payments current account for March 2008 ended in a deficit of SKK 6.1 billion and the capital and financial account of the balance of payments for the same period ended in a surplus of SKK 9.4 billion. The balance of payments current account for January to April ended in a deficit of SKK 16.9 billion and the trade balance surplus was SKK 0.5 billion.

11. The total sterilization position of the NBS in May, in comparison with April, increased nearly by SKK 2 billion to SKK 374.1 billion.

12. With effect from 29 May 2008 a central parity of the crown against euro was revaluated by 17.65%. The lower compulsory intervention rate is 25.6071 SKK/EUR and the upper rate is 34.6449 SKK/EUR.

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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