The Decisions adopted by the Governing Board on the occasion of its 305th regular meeting on 11 February 2005

Decisions adopted by the Governing Board on the occasion of its 305th regular meeting:

1. In its discussion of today´s 305th session concerning monetary and exchange rate policies, the Governing Board of the Bank of Slovenia decreased the obligation of banks related to investment in foreign currency Bank of Slovenia bills from 35% to 30% of balance sheet obligations in foreign currency with a maturity of from 0 up to 180 days in the Decision on the Narrowest Liquidity Band Which a Bank Must Provide.
   A considerable decrease in the inflation rate of January reflects a sustainable tendency towards a decline in inflation, being present for some length of time; however, some powerful seasonal factors above average also had an impact thereto: a resumed reduction in the prices of cars and mainly a marked reduction in the prices of clothing and footware because of a fairly early beginning of winter sales. Other decreases and increases stayed within the limits of expectation. Methodological changes upon the transition into the New Year had no special impact. Because of the above-mentioned, it is likely for rates to slightly increase again in the following months. Should there be no major surprises related to oil prices or to domestic price policies, a resumed and then more robust decrease in inflation could be anticipated towards the end of the first half of 2005.
   The recovered economic activity keeps lending to the non-financial corporate and household sectors brisk. The high growth of lending in 2004 is predominantly ascribed to the processes of real convergence and financial deepening. These processes are also accompanied by the improved investment activity. Their joint result is a slow growth of the broad monetary aggregate, taking into account concurrent changes in size with reference to monetary aggregates.
   Notwithstanding foreign exchange which was in excess on the foreign exchange market, the average euro exchange rate remained unchanged in December, compared to that of November. It amounted to 239.8 SIT per EUR, deviating from the central parity by 0.05%. In January, this deviation floated around 0.03% over the central parity.
   
2. In conformity with the modification of the Companies´ Act (»ZGD-H«) adopted in last December, the Governing Board of the Bank of Slovenia adopted a Decision to determine the financial year for which banks and savings banks will be obliged to compile financial statements according to the International Standards of accounting reporting requirements for the first time. In compliance with the today˝s decision of the Governing Board of the Bank of Slovenia, banks and savings banks will be obliged to compile financial statements according to the International Standards for the financial year starting on 1 January 2006 for the first time. A changeover to the application of the International Accounting Standards brings about changes in the field of accounting, but it might also have a unique impact on the results of banks´ business. The Governing Board of the Bank of Slovenia finds the beginning of the introduction of the International Accounting Standards set at the beginning of the next year more suitable than the one supposedly set in 2007, since the mentioned year will presumably be the year of a planned adoption of the euro and the introduction of the Basle standards. In addition, according to the projections of the Slovene Institute of Auditors, the new Slovene Accounting Standards, being in conformity with the International Accounting Standards, will also be introduced at the beginning of 2006.
   
3. In their discussion on adjustments of functioning in the euro area, the members of the Governing Board got acquainted with information on the activities for establishing new reporting requirements concerning data on the monetary and bank statistics of the Bank of Slovenia in conformity with the Regulation of the European Central Bank. New banks´ reporting means a fulfilment of the requirements of the European Central Bank, stipulating the co-ordination of balance sheets.
   They also got acquainted with integrating the Bank of Slovenia and commercial banks in the Real Time Gross Settlement System in the euro area or TARGET. Already since last October, banks which opted for this method have been offered a possibility of sending or receiving small value credit transfers to or from the STEP 2 system and that of settling banks´ positions via the TARGET system by the Bank of Slovenia. As for large value credit transfers, they have been offered a possibility of settlements in this system by means of remote access, which also means the first step towards the integration into the TARGET system. Information on integrating banks into the above-mentioned system by means of remote access is available on the website of the Bank of Slovenia.