The Slovak koruna led the way in the region yesterday, firming by 1% and moving
close to the level of EUR/SKK 34.30. It was supported by a strong GDP release and
acceptance of all bids in the regular repo tender.
According to the flash estimate, the real GDP growth amounted to 9.5% y/y in Q4,
slowing only modestly from 9.8% in Q3. The detailed structure will be released on
March 6, but the Statistical office indicated that foreign as well as domestic demand
were key drivers. This is in line with our expectations. We assume that the highest contribution came from net exports and fixed investments, while private consumption
has likely slowed down.
Bank board member Sevcovic said the figure is in line with central bank expectations
and the bank needs to known the detailed structure to assess possible monetary policy
impact. As we expect the main driver was net export, the growth should be considered
as non-inflationary. We still continue to expect the first rate cut in the third
With the lack of domestic events till the end of the week, the koruna is expected to
track global trends, driven mainly by US retail sales and Bernanke’s testimony. If the
sentiment in the region remains positive, the koruna could test the level of 34.30 or
even sail further towards December lows.
ČSOB - Investment research