Slovak c.bank says no room now for rate cuts

"There are certain risks arising from possible cost impulses affecting consumer price growth, including the filtering through of high producer prices and the decision (by OPEC countries) to lower oil production quotas," the bank said in a statement. "Bearing in mind these influences, the NBS at present does not see room to lower...interest rates."

The NBS last lowered interest rates on December 22, 2000, by 25 basis points, reducing its key two-week repo rate to 8.00 percent and its overnight rates for sterilising and refinancing to 6.25 and 9.25 percent, respectively. The bank added that macroeconomic developments in December 2000 were in line with recent trends and recent high trade deficits had been fully compensated for by inflows of foreign direct investment.

Slovakia posted a full-year 2000 foreign trade gap of 42.356 billion crowns ($904 million), as opposed to 35.43 billion expected by analysts. The figure was also only slightly lower than the 45.2 billion crown deficit in 1999. The central bank also said its board had approved new technical requirements for potential applicant banks wanting to acquire a banking licence.