Central bank concerned about inflation

WHILE the bank board of the National Bank of Slovakia (NBS) did not increase key interest rates at its March 27 sitting, it did voice concerns over inflation, and did not rule out tightening monetary policy in future.

The board fears that prices will rise more quickly than expected, driven by household consumption and real wage growth, and could endanger the country's macro-economic targets associated with adoption of the euro in 2009.

The NBS reacted to these fears last month by increasing interest rates by 0.5 points to 3.5 percent. According to Ľudová banka analyst Mário Blaščák, rates could rise after general elections in June by a further 0.25 percentage points, the SME daily wrote.

Compiled by Martina Jurinová from press reports
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