The downward trend of Slovakia's foreign exchange reserves continued in the last week of May, leaving forex reserves below $4 billion at the closed on May 26 ($3.9540 billion), down $163.5 million from the previous week.
The drop in the forex reserves of the National Bank of Slovakia (NBS) was behind this development, falling $142.1 million to $2.5669 billion in the same period. The forex reserves of commercial banks decreased $21.4 million to $1.3871 billion.
The decrease in the central bank's forex reserves resulted from its interventions on the forex market to curb the excessive volatility of the Slovak crown exchange rate. Another reason were installments that had to be paid on Slovakia's debt and exchange rate differences stemming from the weakening euro against the USD.
The central bank sold more than 100 million euros during in its interventions on the domestic forex market in the last week of May.
Slovakia's total forex reserves reached their peak on September 16, 1998, when they totaled $8.0078 billion. This increase was caused mainly by the pre-election expectations of banks and their clients, who started to convert massive volumes of crowns into foreign currencies.
