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Central bank keeps key interest rates on hold again

THE KEY interest rate remained unchanged in February. Conclusions from the meeting of the central bank's board on February 27 show that deviations in macroeconomic development from predictions of the National Bank of Slovakia (NBS) were caused by cost or one-time factors. Thus, the NBS had no reason to change its current monetary policy setting, the SITA newswire wrote.

THE KEY interest rate remained unchanged in February. Conclusions from the meeting of the central bank's board on February 27 show that deviations in macroeconomic development from predictions of the National Bank of Slovakia (NBS) were caused by cost or one-time factors. Thus, the NBS had no reason to change its current monetary policy setting, the SITA newswire wrote.

The two-week sterilisation repo rate remains at 4.25 percent p.a. The one-day sterilisation repo rate is 2.25 percent p.a. and the one-day refinancing rate is 5.75 percent p.a. The central bank has kept interest rates on hold since last April.

NBS Vice Governor Viliam Ostrožlík told the press that none of the NBS Bank Board members present suggested a change in interest rates.

According to the central bank, the pro-growth influence of food price development still dominates the growth dynamics of consumer prices. The real economy showed dynamic GDP growth related to the one-time effect stemming from the accumulation of tobacco product stocks. After the figures were cleared of this factor, economic development in 2007 complied with the central bank's expectations. Based on the inflation development, it can be said that food and energy prices grew faster than the central bank had expected. Their up-to-date development was reflected by growth dynamics of certain service prices. The NBS perceives this as an exclusively cost-driven inflation factor.

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