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NBS to lower basic interest rate to 3.75 percent in line with ECB

The National Bank of Slovakia (NBS) has lowered its key interest rate from the current 4.25 percent to 3.75 percent as of October 29, NBS spokesperson Jana Kováčová told the TASR newswire on October 28.

The National Bank of Slovakia (NBS) has lowered its key interest rate from the current 4.25 percent to 3.75 percent as of October 29, NBS spokesperson Jana Kováčová told the TASR newswire on October 28.

This follows the European Central Bank (ECB), which, along with other European banks, initiated a co-ordinated reduction of rates.

The NBS lowered the key rate for two-week repo tenders to 3.75 percent. The overnight rate for refinancing operations was reduced to 4.75 percent, while that for sterilisation operations was, conversely, increased to 2.75 percent.

"The expected impact of the current financial crisis, especially in 2009, has caused Slovakia's production and exports to slow down, and this will show up in the slowdown in the growth of the gross domestic product (GDP)," NBS Governor Ivan Šramko said.

The monetary body had previously forecast the country's economic growth for 2009 at 6.6 percent.

Šramko said monthly indicators of the Slovak economy have so far not offered clear-cut signals of dramatic deceleration in Slovakia. But it is especially the most recent and anticipated fall in foreign demand for Slovak goods and services that could trigger adverse effects.

The NBS will unveil the updated economic growth estimate in early December, when it releases its new medium-term macroeconomic prognosis. The cut brought the main two-week repo rate to 3.75 percent, while the overnight rate was reduced to 4.75 percent for refinancing operations but increased to 2.75 percent for draining market liquidity. TASR

Compiled by Zuzana Vilikovská from press reports
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