The Decisions adopted by the Governing Board on the occasion of its 293rd regular meeting on 1st July 2004
The Decisions adopted by the Governing Board on the occasion of its 293rd regular meeting:
- Assessment of Monetary and Economic Movements after Entry into ERM2
The Governing Board of the Bank of Slovenia increased sell/buy FX rate from 0,25% to 1%. On their 293rd ordinary session held today, the members of the Governing Board of the Bank of Slovenia got acquainted with information on what is going on after Slovenia´s entry into the ERM2 exchange rate mechanism. Our market rate has been floating around the central rate within the fluctuation band required; there has been no unexpected movement. Exchange rate stability is going to be the major direct target of the Bank of Slovenia, applying its disposable instruments, if necessary. After entry into ERM2, monetary policy is in transition, turning from a period of depreciation tendency into a period of a rather stable exchange rate. Not only practice in the foreign market, but also interest rate movement and the corresponding variables of our monetary policy instruments have to follow the achievement of exchange rate stability. Since monetary policy cannot pursue several goals at a time, its businesses are no more fully autonomous; namely, the interest rates, ranking among the instruments of the Bank of Slovenia, depend on those set by the ECB plus on a market risk- premium.
Inter alia, the Governing Board of the Bank of Slovenia also dealt with monetary movements. Since inflation enhanced considerably in most euro area countries, their central banks show a gradual tendency to more restrictive monetary policies. A revival of economic growth puts pressure on commodity prices and crude oil prices, reaching an additionally high level due to crisis spots in some industrial countries. High commodity prices ever more affect producer prices, this year growing almost twice as rapid as consumer prices and are thus already gradually calculated in inflation. In June, euro area inflation totalled 2.4%, whereas inflation in the USA already exceeded 3%. Inflationary pressures have also been reflected in price movements in Slovenia. This year, inflation increased from 3.5% in April on a year-to-year basis to 3.9% in June.
In Slovenia, GDP growth amounted to 3.7% in the first quarter of this year on a year-to-year basis. A high level of investment, also attested by enhanced lending activities of domestic banks, and more favourable indices in foreign trade together contributed to economic growth. Because of condusive interest rates at home, companies ever more avail theirselves of being financed at domestic banks, particularly in foreign currency. The share of lending from abroad has been decreasing. It reached a full third and less than a fifth of all lending in the second half of last year.
- Decisions adopted on the session of the Governing Board of the Bank of Slovenia
Inter alia, the Governing Board of the Bank of Slovenia also adopted the Decision on the Reporting of Monetary Financial Institutions. The Bank of Slovenia became a Member State of the European System of Central Banks (ESCB) by means of its entry into the EU. Inter alia, area of monetary and banking statistics has to be harmonised with the requirements of the ECB in order to get the Republic of Slovenia integrated in the Economic and Monetary Union (EMU). This renewal of the MFIs´ reporting shall aim at establishing more flexible reporting of statistical data, submitted to the Bank of Slovenia and the European Central Bank. The Decision mentioned stipulates the actual reporting population according to the corresponding definition of the European Central Bank, as well as the types of reports harmonised with the ECB´s requirements, inclusive of the relevant schedules. It is Stage I of the renewal of the MFIs´ system of reporting that is in question herein, and the whole reform should presumably be completed on Slovenia´s entry into the euro area. Along with the first Instructions for its implementation, the Decision mentioned shall take effect on the day of its publishing in the Official Gazette of the Republic of Slovenia. The Instructions are also going to be published on the website of the Bank of Slovenia, under the following title: »Reporting to the Bank of Slovenia According to the ECB´s Requirements«
The Governing Board of the Bank of Slovenia also got acquainted with a draft compilation of financial accounts by means of direct reports for 2001 and 2002. The data are of temporary nature and there is a possibility of reviewing them on a basis of data already collected for 2003. Thus, the Bank of Slovenia is going to gradually introduce quarterly sample reporting for the purposes of financial accounts´ statistics. The quality statistics of quarterly financial accounts is also one of the core requirements imposed by the ECB in the field of statistics.
- Licensing of the office of a member of the Management Board
Pursuant to a proposal of the Commission of the Governing Board of the Bank of Slovenia for the Preparation of Opinions on Issuing Licences to Take up the Office of a Member of the Management Board, the Governing Board of the Bank of Slovenia issued a licence to Mr. Tomaž Sila for the purpose of taking up the office of a member of the Management Board of the Slovene Agricultural Bank Joint-Stock Bank, based in Ljubljana, »Slovenska zadružna kmetijska banka d.d., Ljubljana« and to Mr. Gorazd Trček for the purpose of taking up the office of a member of the Management Board of the Gorenjska-Region Bank Joint-Stock Bank, based in Kranj »Gorenjska banka d.d., Kranj«.