The Decisions adopted by the Governing Board on the occasion of its 308th regular meeting on 7 April 2005

Decisions adopted by the Governing Board on the occasion of its 308th regular meeting:

1. In its 308th session, the Governing Board of the Bank of Slovenia discussed monetary and exchange rate developments. Pursuant to the discussion, the Governing Board decided to increase the price of the buy/sell FX swap by 0.25 percentage points. This was an issue of a structural adjustment of the interest rates of monetary policy instruments, used by the Bank of Slovenia to ensure further stability in the money market. Simultaneously, the Governing Board also decided to decrease the mandatory foreign currency bills subscription from 30 to 25 percent, as stipulated in the Decision on the Minimum Level of Liquidity to be Maintained by Banks.
   At this point, the Governing Board of the Bank of Slovenia also discussed the March inflation. Consumer prices on average rose by 1.1 percent in March, causing year-on-year inflation to increase to 3.1 percent. The March hump of inflation is a consequence of ample seasonal fluctution of the prices of clothing, footware, fruits and vegetables, and of the rise in the prices of oil derivatives. In conformity with the macroeconomic projections of the Bank of Slovenia, Slovenia should, notwithstanding the March rise, fulfil the relevant convergence criterion in the middle of the next year. Simultaneously, according to the opinion of the Governing Board of the Bank of Slovenia, inflationary floating, given comparatively high prices of oil and its derivatives, should provide a warning to economic policy makers to be cautious in taking further steps, in particular in wage and regulated price policies.
   In March, the tolar appreciated to 239.71 SIT or 0.03 percent above the central parity under an influence of the surplus supply of foreign exchange on foreign exchange markets. The tolar exchange rate remains stable.
   
2. The Governing Board modified and amended the Decision on the Conditions Which a Bank Credit Intermediary Must Meet. After Slovenia´s entry into the European Union, EU Member States´ banks were given the opportunity to also within the territory of the Republic of Slovenia directly, following the one-pass principle, perform services the licence for which they were given by a parent supervisory authority. In compliance with the European banking directive, EU Member States´ banks need not be given licence by the Bank of Slovenia to perform services directly and may therefore perform services directly, notifying the Bank of Slovenia of their intention during a procedure of notification. The Bank of Slovenia has received 79 notifications of performing services directly up to now. According to the amended Decision concerned, credit intermediaries are also obliged to report to the Bank of Slovenia on the scope and kind of transactions concluded for the EU Member States´ banks which did not establish their branches in Slovenia. In this way, it will also be possible for the Bank of Slovenia to check whether liaison with credit intermediaries is strong enough to, in accordance with the criteria of the European Commission, imply the so-called sustainable presence of a bank on the Slovene market, but to do so, a bank must establish a branch. The aforementioned change also means additional consumer protection.