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Central bank cuts key interest rates again

THE NATIONAL Bank of Slovakia (NBS) has again cut key interest rates a quarter of a percentage point.

These rates are used as benchmarks by commercial banks and other lenders to set the rates consumers and businesses pay on loans.

On April 24, the NBS Bank Board reduced the two-week sterilization repo rate by 0.25 points to 4.25 percent. The one-day refinancing repo rate decreased to 5.75 percent, and the one-day sterilisation repo rate was also reduced by 25 basis points to 2.25 percent, the SITA news wire reported.

Fiscal development in the first quarter of 2007, together with a favourable inflation outlook for 2008, enabled the NBS to lower key interest rates.

"Considering this, the NBS Bank Board decided to cut interest rates by 0.25 percentage points," central bank Governor Ivan Šramko told the TASR news wire.

Analysts had expected the central bank to cut key interest rates. They said the cuts are just adjusting the rate to the current situation in the market.

Commercial banks told the Hospodárske Noviny economic daily that they are not preparing any significant changes in rates because they expected such a development, so they already incorporated the reduction into rates for their clients.

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