Hot topics

Slovenia Business Week no. 36/2004: D&B Satisfied with Stability of Tolar

International rating firm Dun&Bradstreet (D&B) has pointed to the "remarkably stable" euro-tolar exchange rate in July, the month following Slovenia's accession to ERM II, in its latest report for the country


International rating firm Dun&Bradstreet (D&B) has pointed to the "remarkably stable" euro-tolar exchange rate in July, the month following Slovenia's accession to ERM II, in its latest report for the country.

D&B had said in its previous report that it did not expect the tolar to be the subject of a speculative attack during the country's stint in the waiting room for euro zone membership.

Developments in the first month of ERM II membership suggest that Slovenia's central bank "wishes to ensure the tolar experiences only marginal deviations from its central parity with the European single currency".

In its report for September, D&B retains Slovenia's risk rating at DB2c, the highest in the Eastern European region. Moreover, the latest risk report continues to bear a growth sign, meaning that Slovenia's rating could be upgraded in the coming months.

The tolar's strong showing in the first month after ERM II membership convinced D&B that "Slovenia's risk outlook remains on a positive footing".

Meanwhile, D&B says that Slovenia's biggest challenge on the way to euro zone membership is keeping inflation in check. Although inflation has inched down recently, it is still above the levels prescribed by the Maastricht criteria for euro zone membership.

Otherwise, D&B points to "buoyant GDP growth in recent months", which has resulted in an 11.1 percent growth in manufacturing output.

Source: Slovene Press Agency STA

Author: Branka Murn