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Banking

NBS governor says bank not to intervene against strong crown.

NBS governor says bank not to intervene against strong crown. The National Bank of Slovakia (NBS) would not intervene immediately to restrain the fast appreciation of the crown exchange rate vis-à-vis the euro, NBS governor Ivan Sramko declared. He explained that historical experience so far showed that these trends do not persist for a protracted period and thus no conclusions could be drawn from them. In addition, the governor pointed out that the growth rate of the exports has remained quite healthy and still has not suffered from the strengthening of the local currency. Accordingly, the central bank respected the dynamics of the crown exchange rate for the time being but Sramko emphasized that it was ready to act in case the circumstances required that. This week, the SKK /EUR exchange rate reached a new all-time record high of 35.5, which represents a 7.6% firming over the central ERM II parity. On the other hand, general expectations are that the NBS would have to raise the key interest rates in order to fight off demand-pull inflation but this step would only add further to the appreciating pressures to the crown.

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