INSTANT VIEW 3-Slovak Sept EU-norm CPI above fcasts

...the 
Slovak Statistics Office said on Tuesday. 
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 KEY POINTS: 
 SLOVAK EU-NORM INFLATION        SEPT 07     SEPT 07 FORECAST 
  pct change mo/mo                +0.3        +0.1 
  pct change yr/yr                +1.7        +1.6 
(Details of Sept inflation data .............[ID:nPRG000543]) 
  
- Food and non-alcoholic beverages, which have a strong 
weighting in the consumer price basket, rose by 0.8 percent 
month-on-month, after a 1.0 percent drop in August. 
- Housing, water, electricity, gas and other fuels prices, which 
pushed inflation up last year, rose by 0.1 percent on the month 
in September, after a 0.1 percent increase in August. 
- Annual price growth in the housing category, which has the 
strongest weighting in the basket, was 2.7 percent in September. 
- Transportation prices fall by 0.1 percent month-on-month, 
after 0.5 percent growth in August. 
     
    ANALYST COMMENTS: 
JURAJ VALACHY, ANALYST, TATRA BANKA, BRATISLAVA 
    "EU-norm inflation came in line with the last week's 
(September) local inflation data." 
    "There is a clear rise in food prices, and we expect a 
further rise in the coming months. But this rise should not 
endanger the Maastricht criterion (for inflation)." 
    "This (September inflation figures) should not trigger any 
monetary policy adjustments." 
     
PIOTR MATYS, ANALYST, 4CAST, LONDON 
    "In our view, there is no significant risk for Slovakia of 
failing to meet the Maastricht criteria. Note that the rise to 
1.7 percent year-on-year in September pushed the 12-month 
average to 2.2 percent from 2.4 percent. 
    "In terms of interest rates outlook, we expect the NBS to 
keep rates on hold in October." 
     
EDUARD HAGARA, ANALYST, ING BANK, BRATISLAVA 
    "There is nothing surprising in the data. There was a slight 
acceleration in food price growth but this is not only the case 
of Slovakia." 
    "It (food price rise) should not influence the fact that 
Slovakia is meeting the Maastricht criterion for inflation. 
Therefore, we do not see any implications for monetary policy." 
     
    MARKET REACTION: 
    - The Slovak crown was at 33.680 per euro  as of 
0705 GMT, compared with 33.670 before the data release. It 
closed at 33.735 on Monday. 
     
    BACKGROUND:  
    - The central bank follows inflation calculated by the EU 
methodology as a part of Slovakia's plan to adopt the euro in 
2009. 
    - Prices under the local methodology rose 0.2 percent on the 
month in September, putting the annual rate at 2.8 percent. 
    - Slovakia aims to meet all criteria for euro adoption in 
2008. The central bank predicts the EU-norm inflation rate of 
1.5 percent at the end of 2007. 
    - The central bank cut its key two-week repo rate by 25 
basis points in March and April, bringing it to the current 4.25 
percent, after the rising crown tightened monetary conditions 
and helped improve the inflation outlook. 
    - The bank left interest rates unchanged in September. 
    LINKS: 
- For further details on September inflation and other past 
data, Reuters 3000 Xtra users can click on the Slovak Statistics 
Office's website: 
http://wwww.statistics.sk/webdata/english/index2_a.htm 
      
- For LIVE Slovak economic data releases, click on...... 
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- Summary of short-term economic data forecasts...... 
- Stories on Slovak currency moves........................[SKK/] 
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[BRATISLAVA/Reuters/Finance.cz]