PRAGUE. FEBRUARY 27. INTERFAX CENTRAL EUROPE - The National Bank of Slovakia's (NBS) governing board left key interest rates unchanged, in line with analyst expectations, at a meeting Tuesday, the bank announced.
"Board Members of the NBS decided after its meeting [Tuesday] not to change the country's interest rates," NBS spokesperson Jana Kovacova said.
The benchmark rate was thus kept at 4.75%, where it has been since September 2006. The one-day sterilization rate remains at 3.25% and the one-day refinancing rate at 6.25%.
Tuesday's decision corresponds with analyst expectations.
"This is in line with our and prevailing market expectations, although we saw some risk of a rate cut due to the crown strengthening," Slovenska sporitelna analyst Michal Musak said.
The no change decision means the NBS opted to play safe when considering moderate inflation risks and the exchange rate, which the NBS perceives to be too strong, Musak added.
Slovakia is trying to keep inflation under control to meet one of the Maastricht criteria for euro adoption, planned for 2009.
Analysts expect a possible change to rates in the second half of 2007.
"We maintain our base scenario, which expects rates to decline towards the ECB rate [of 3.5%] only in the second half of the year if the inflationary outlook will be bright enough to cause no doubts about meeting the Maastricht criterion of inflation," Musak said.
Last year, the NBS raised rates four times, a total of 1.75 percentage point.