The Slovak koruna finished yesterday’s
session slightly stronger at EUR/SKK 35.63
amid a low activity as the market lacked any
impulses. There was some slight profit
taking apparent at the start of the day, but
this didn’t go far at all.
Today, the central bank announces its
interest-rate decision. Based on recent
koruna appreciation and better inflation
outlook, we expect the key repo rate to be
left unchanged at 4.75%. Moreover, we
assume that the central bank will wait on the
detailed structure of the Q3 GDP to be
published on December 7. The flash
estimate posted an unexpected 9.8% y/y
growth. The tone of the central bank
statement, however, will be crucial.
Today, we expect sideways trading ahead of
the NBS meeting. The expected “no change”
decision should be neutral for markets. The
koruna is more likely to follow global factors
and development on the EUR/USD market.
(CSOB - Investment research)