The Slovak central bank (NBS) board has cut its key interest rates.
As a result, two-week repo tenders will, as of March 1, drop by 1 percentage point to 3 percent; overnight refinancing operations by 1.5 percentage point to 4 per cent; and overnight sterilisation operations by 0.5 percentage points to 2 per cent.
Analysts believe the central bank has slashed its key interest rate over the development of the Slovak crown, which has been surging in recent weeks. Last week it broke the 38 SKK/EUR barrier to hit a new, all-time high of 37.83 SKK/EUR.
The central bank has been fighting the Slovak unit for the fourth week now, flooding the money market with superfluous liquidity. Having had all of their bids in regular sterilisation repo tenders rejected by NBS, the banks have Sk300 bn in surplus funds and interbank rates fell to an all-time low of 2 per cent.
Source: TASR
