10.10.2007

The Slovak interbank interest rate in September was relatively quiet, as thedifference between the maximum and minimum for the monthly interest rate was12 basic points and only 5 points for the 12 month interest rate. Incomparison with the previous month the average rate did not change as no changesoccurred in the National Bank tariff rates rules.

September yields of Slovak bonds were lower in comparison with August withthe average decrease moving between 5 – 10 basic points. Slovak bonds mainlycopied the development of Eurozone bonds. The spread between Slovak and Germanbonds stayed relatively high for all maturities, at the level of around ahalf-a-percentage point even though in August German yields dropped due to anincrease in global aversion to risk, lowered expectations in the Eurozone due tothe ECB’s softer monetary policy.

In September and in the first quarter of October two bonds emissions wererealized by ARDAL. The three-year zero bond emission was the only one to besuccessful in which ARDAL was able to place SKK 1 bil on the market at anaverage revenue of around 4.40%.

The Average daily closing rate of the Slovak Koruna in September as opposedto August was about 0.6% weaker, but stronger on a year-on-year basis by about9.8%. In spite of regional influences the Slovak Koruna in September weakened asthe only “V4 currency“ in comparison to August. The main reason was theannouncement of Eurostat of the calculation of the public finance debt, whichcould negatively influence the fulfillment of the Maastricht criteria.

Richard Tóth, Head economist Privat Banka a.s.