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Central bank keeps key interest rates on hold again

IN LINE with expectations, the National Bank of Slovakia (NBS) kept its interest rates unchanged on March 25. This means that the two-week sterilisation repo-rate - its key rate, from which commercial banks' deposit and loan rates are derived - remains at 4.25 percent per annum. The central bank kept the one-day sterilisation repo rate at 2.25 percent p.a. and the one-day refinancing rate at 5.75 percent p.a., the SITA newswire wrote.

IN LINE with expectations, the National Bank of Slovakia (NBS) kept its interest rates unchanged on March 25. This means that the two-week sterilisation repo-rate - its key rate, from which commercial banks' deposit and loan rates are derived - remains at 4.25 percent per annum. The central bank kept the one-day sterilisation repo rate at 2.25 percent p.a. and the one-day refinancing rate at 5.75 percent p.a., the SITA newswire wrote.

NBS governor Ivan Šramko warned at a press conference the same day that fast growth in wages, in particular in the public sector, should not be allowed to create an acceleration in inflation, the ČTK newswire wrote.

The central bank kept its rates on hold in spite of the continuing increase in the prices of goods and services. In February inflation was at its highest since December 2006. During the second month of 2008 the year-on-year inflation rate rose to 4 percent, up from 3.8 percent in January. The central bank sees cost factors behind the growth in inflation.

Šramko added that a similar development has also occured in other European Union member countries, and noted that the bank still saw no demand-led increase in prices, according to ČTK.

The central bank has kept interest rates on hold since April last year. The NBS last changed its rates in March and April 2007, cutting them by 25 basis points in each month.

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