Download doc

Marián Jusko
The Slovak Crown: Past and Future
EURO introduced in Slovakia in 2008?
As part of its coverage of the banking
industry, AmCham Slovakia spoke with Marián Jusko, Governor
of the National Bank of Slovakia. We asked Mr. Jusko about
the first 10 years of existence of the Slovak crown and the
expected position of the Slovak crown after May 2004. We
also asked him to address the role of the National Bank of
Slovakia after Slovakia’s accession to the EU and about his
opinion of the potential influence of foreign banks on the
Slovak bank market.
The Slovak currency (“SKK”) celebrated its 10th anniversary
last year. What development has it made during those years?
The responsibility for the development of the Slovak
currency was undertaken by the National Bank of Slovakia
(NBS) in 1993. When setting the exchange rate, the 5component monetary basket (USD, DEM, ATS, GBP and FRF) was
maintained, which was gradually reduced to two currencies
only – German mark (DEM) and US dollar (US$). During this
time a fluctuation-fixing band accounted for +/- 0.5%,
gradually expanding to +/- 0.75%. The purpose of such a
regime was, notably, to stabilize the Slovak currency. In
the course of the following years we managed to establish
conditions for a gradual release of the currency up to the
introduction of a floating exchange regime in 1998. The
principal change was made in a reference currency; since
January 1, 1999, it has been the euro. Since then the
Slovak
currency
is
market-based,
strengthening
and
weakening its exchange rate vis-a`
-vis the euro upon
supply and demand. Devaluation of the currency by the NBS
was inevitable only once – it happened in 1993 and it was a
devaluation of 10%.
What will be the position of the
accession to the EU in May 2004?
SKK
after
the
Slovak
Slovak accession to the EU itself will not bring about any
immediate impact on the position of the SKK. Until fixing
what is called a central parity of the SKK and EURO, which
is a criterion for joining the ERM II system, the SKK will
stay in a managed floating regime which means that its
exchange rate vis-a`
-vis the reference EURO will be
driven by the market demand in our currency, and according
to the development of the fundamental elements of the
economy. Negotiations on fixing the central parity of the
SKK and EURO should be launched in the near future. They
will be held in strictly confidential conditions to avoid
any risk of information leaks that may contribute to
speculative operations in the foreign currency market.
What developments do you expect
introducing the EURO in Slovakia?
in
the
context
of
According to the strategy developed by both the NBS and the
Slovak Government, the EURO should be introduced in
Slovakia in 2008 or 2009. However, our country must meet
the Maastricht criteria, which are necessary for joining
the Economic and Monetary Union (EMU). The most difficult
challenge in this context is probably the required
reduction of the fiscal deficit below 3% of GDP, and a
reduction in inflation, as it should not exceed 1.5% of the
average inflation of the three EMU Member States with the
lowest inflation rate. However, our economic reforms have
been designed and launched to cope with such high demands
and the Slovak economy should be able to meet the criteria
in two or three years, which will enable us to apply for
the EMU membership no later than the end of this decade.
“With regard to the size of the Slovak market and scope of
services and pro-ducts provided, one can say that there is
no demand in Slovakia for a service or a product that could
not be offered by the current Slovak banking sector.”
Marián Jusko
How will the role of the National Bank of
changed after the Slovak accession to the EU?
Slovakia
be
No major changes are envisaged for the NBS primary roles
after accession to the EU. Being the central bank, it will,
until our accession to the EMU, still be the emitting bank,
issuing both, SKK bank-notes and coins. NBS will also
continue to carry out its monetary policy and make use of
all instruments available. This means that the NBS Board
will continue to assess monetary development in Slovakia
and set key interest rates, in exactly the same way it is
managing it now, when Slovakia is not a EU Member State.
Neither the basic tasks in the field of bank supervision
nor payment systems shall be changed though there will be –
and it has already started – a very intensive coordination
of procedures with the EU Member States in these two areas.
How do you perceive an institutional development in the
bank market? How big, in your opinion, is the potential of
the bank market, and/or to what extend has it already been
saturated? Are other foreign banks still expected to enter
our bank market?
The banking sector was significantly stabilized from 1998
to 2000 in Slovakia, thus completing a bank privatisation
process where the State majority ownership rights in all
key financial institutions were taken over by majority
owners from strong foreign financial groups. This process
has led to a significant recovery of the sector at large,
and we can say today that the banking sector in Slovakia is
solid and stable with the banks offering a comprehensive
spectrum of products for both corporate and retail clients.
There are 18 banks and 3 branches of foreign banks
operating in Slovakia, as of the beginning of the year
2004. With regard to the size of the Slovak market and
scope of services and products provided, one can say that
there is no demand in Slovakia for a service or a product
that could not be offered by the current Slovak banking
sector. In terms of any other potential entity interested
in entering into the Slovak bank market, it is primarily up
to them whether or not they will be interested in entering
and finding their
respective place. We have no quantitative restrictions in
this context. Any applicant for a banking license is judged
by the NBS within the terms of the relevant legislation.
What impact could positive results of the Slovak foreign
trade have on the exchange rate development in Slovakia?
Any outlook referring to the exchange rate of the SKK,
whether we speak about the near or distant future, would be
of a speculative nature only. Therefore I do not consider
it useful to start any discussion on this topic. Economic
development, labor productivity and of course many other
factors including the balance of payments and foreign trade
results are reflected in the overall exchange rate
development. Strengthening the exchange rate of the SKK
cannot
be
evaluated
separately
from
the
overall
macroeconomic context. Furthermore, a consideration should
also be made of overall development in the euro area, that
means in the area where our reference euro currency is
used. In principle, we can say that if our economy is
flourishing,
our
Slovak
currency
SKK
will
also
be
successful and its rate will strengthen. However, should
the SKK be stronger due to speculative operations in the
foreign exchange markets, such development will not be of a
benefit for our economy.
Katarína Lepiešová
Zuzana Lysáková,
AmCham Staff
Marián Jusko graduated from the University of Economics in
Bratislava where he also took his PhD. In 1991 he was Head
of the Banking Analyses and Prognoses at the State Bank of
Czechoslovakia, then Deputy Minister at the Ministry of
Administration and Privatisation of National Property of
the Slovak Republic and Chairman of the Board of the
National Property Fund. In 1992 he worked at the
Headquarters of the State Bank of Czechoslovakia for the
Slovak Republic in Bratislava. Between January 1, 1993 and
July 29, 1999 he was Deputy Governor of the National Bank
of Slovakia; and since July 30, 1999 Marián Jusko has been
the Governor of the NBS. Since April 19, 2000 Mr. Jusko has
been a member of the Scientific Council of the University
of Economics in Bratislava and from December 18, 2002 a
member of the Management Board of Comenius University in
Bratislava.