FRANKFURT (Reuters) – Interest rates have not necessarily peaked in the eurozone, where inflation risks remain on the upside, BoG Governor and European Central Bank (ECB) Governing Council member Nicholas Garganas was quoted as saying yesterday. In an interview with Bloomberg news agency, Garganas also said, “Rates are not particularly high, they’re at moderate levels.” While the ECB has taken a wait-and-see stance on monetary policy and its decisions would be driven by how the inflationary risks evolve, he said this did not necessarily mean that rates have reached their highest point in this cycle. “I would not say that interest rates have reached a level that could be described as a peak. There’s nothing sacrosanct about the level of interest rates. What is important is to assess the incoming data and their implications for inflation.” The ECB has lifted its benchmark rate to 3.75 percent and analysts expect a 4 percent rate by mid-year, though financial markets are less certain given a US slowdown.

The country’s largest dairy group Vivartia said yesterday its 2006 net profits rose 54.7 percent year-on-year after the firm merged with snack maker Chipita and absorbed three subsidiaries. Vivartia said net profits rose to 49.5 million euros last year from 32 million a year earlier, with earnings per share (EPS) up 40 percent to 0.67 euros. Sales increased 7.8 percent to 949.7 million euros, while earnings before interest, tax, depreciation and amortization (EBITDA) rose 10.9 percent to 142.3 million. The firm will propose a 1.25-euro-per-share dividend, resulting from a decrease in share capital, it said. Vivartia said it expects sales to exceed 1.1 billion euros in 2009, with the EPS seen doubling. (Reuters)

The owners of Turk Telekom, partly privatized in 2005 for $6.55 billion, plan to pay off their remaining debt to the Turkish Treasury at the end of the month, company officials told Reuters yesterday. The early payment, $4.2 billion or $4.3 billion including interest, will affect Treasury financing and Turkey’s closely watched primary surplus. Ojer Telekomunikasyon – a special purpose vehicle of Saudi Oger Telecom and Telecom Italia which bought a 55 percent stake in Turk Telekom in 2005 – has taken out a $4.3 billion syndicated loan to pay off its debt. The buyers paid 20 percent of the total in cash in 2005 and were due to pay the rest in five equal installments with an interest rate of Libor plus 2.5 percentage points. (Reuters)

The Romanian leu fell to its lowest level against the euro in almost two weeks yesterday after the central bank’s unexpected cut in interest rates fanned some worries about the risk of resurgent inflation. The bank cut rates by half a point to 7.5 percent on Monday, catching analysts off guard for the second month running, after inflation declines exceeded expectations. “The leu is falling because of the rate cut,” said one dealer with a foreign bank. “It scared away some investors who assessed the upcoming risks for inflation.” (Reuters)