Decisions adopted by the Governing Board on the occasion of its 278th regular meeting on 6 November 2003

Important matters dealt with and decisions taken by the Bank of Slovenia Governing Board on its 278th regular meeting:
The Board discussed the current economic and monetary developments and assessed that both external and internal conditions have resulted in a decline of inflation rate. The October figures show a drop of the headline inflation below 5.0%, i.e. to 4.8% annually, and further reduction in the inflation dynamics is expected in the next months. When determining the level of the interest rate changes, the Board took into account the need to keep interest rates at an appropriate level which will continue to enable the bank to conduct a suitable monetary policy, both in the sense of further reduction of the inflation rate, as well as in the sense of ensuring the nominal convergence on the interest rates in the process of approaching the ERM II and EMU. In accordance with the nominal convergence of the level of interest rates to that of the Euroarea, the Board agreed to reduce the interest rates of the Bank of Slovenia instruments by 25 basis points, with the exception of the lombard rate which will be reduced by 50 basis points. The interest rates will change as follows:

• lombard loan: from 8.0% to 7.5%
• overnight deposit facility: from 3.5% to 3.25%
• 60-day Tolar bills: from 6.25% to 6.0%
• 270-day Tolar bills: from 7.25% to 7.0%
• repurchase facility for bills denominated in foreign currency: from 7.0% to 6.75%
• buy/sell FX swap: from 3.25% to 3.0%
• sell/buy FX swap: from 1.75% to 1.5%

In line with the changes in the FX swap prices, the main refinancing rate and the deposit rate will change as well, to 5.0% and 3.5%, respectively.

The new interest rates will take effect from 7 November 2003.