In a bid to match the European Central Bank's interest rate before joining Eurozone in January 2009, the National Bank of Slovakia lowered its key interest rate by 50 basis points to 3.75%. Economists had expected the central bank to hold the rate at 4.25%.
Overnight refinancing rate lowered to 4.75% from 5.75%, while overnight sterilization rate hiked to 2.75% from 2.25%. The central bank said the new rates will be in effect from October 29.
However, ECB President Jean-Claude Trichet signaled Monday that the central bank is prepared to cut interest rates for second month in November, assuming that upcoming data on inflation indicates a further alleviation of the upside risks to price stability.
"I consider possible that the Governing Council would decrease interest rates once again at its next meeting on the 6th of November," said Trichet. "It is not a certainty. It is a possibility."
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