NBS again intervenes to weaken crown

The central bank again intervened on the forex market yesterday, buying eruo and weakening the crown 30 basis points to 41.9 against its euro reference currency. However, dealers said the bank could not keep propping up the crown for long, as the strength of market pressures pushing it higher was simply too great.

Among the factors driving the new crown strength are confidence over Slovakia’s new centre-right government and its chances of joining Nato and the EU, as well as an interest differential, whereby commercial banks depositing crowns with the central bank earn 8 per cent interest, while the central bank earns only 3.3 per cent on its euro reserves.

Unless the interest differential is reduced., the national bank by the end of the year could lose Sk150 million ($3.75 million).

Slovakia’s strengthening currency this year has caused the central bank losses, on paper, of Sk17 billion, even though the 2002 state budget plan calls for it to make a profit of Sk4.7 billion. The loss is so far only theoretical, but would have to be covered if Slovakia entered the European Monetary Union.

Dealers have speculated that the central bank will defend the crown until the next piece of positive economic or political news – potentially an invitation to join Nato at the end of this month – and then release the crown and let market forces determine its final strength.

Compiled by Tom Nicholson from press reports.
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

Top stories

The interactive exhibition Elements of Art is dedicated to the 70th anniversary of the Žilina Music Conservatory on November 18, 2021.

Weekend: US basketball players score big in Slovakia

A potential Christmas present, one hike, nice sports stories, and more. Dive into reading this week's roundup.

26. nov

News digest: Employers finally get manual for employee Covid testing

Bratislava starts the Christmas season online and the refurbishment of one of the biggest fountains in Slovakia. Tatra ski resorts have switched on their snow-making machines.

26. nov
Christmas trees began appearing in the squares during the First Czechoslovak Republic and there is a touching Christmas story behind it.

Lockdown for just two weeks? Forget it, say experts

The experts advising the government expect some rules may lift before Christmas, but only for the vaccinated.

26. nov
Chicago Blackhawks right wing Marián Hossa prepares for a face off against the Florida Panthers during an NHL hockey game in March 2017.

The (in)conspicuous superstar that had to suffer to achieve great things: Marián Hossa

The Slovak hockey player has been inducted into the Hockey Hall of Fame.

25. nov
Skryť Close ad