CROATIAN PRESIDENT SUPPORTS HNB'S MEASURES

ZAGREB, March 12 (Hina) - Croatian President Stjepan Mesic on Wednesday reiterated his support for the latest measures by the Croatian National Bank (HNB) limiting the granting of bank loans, and again stressed the need for an export-oriented economy. #L# "I support the HNB's measures because I believe that they are aimed at preventing things from getting out of control, so we could avoid the South-American syndrome," Mesic said during a visit to the HNB. He said that Croatia needed growth impulses and an export-oriented economy. Mesic and his associates toured the HNB, including its strongroom, and talked to senior bank officials and other members of the HNB Council. With its latest measures the central bank has limited the growth of bank loans to 16% this year and introduced an obligation on a 35% bank obligation-claim ratio. HNB Governor Zeljko Rohatinski said the purpose of the measures was to minimise the possibility of what happened in South America happening to Croatia. He hoped that the measures would not cause loan restrictions which could affect the growth of GDP. One of the reasons for adopting such measures is the growth of loans which banks are seeking abroad, Rohatinski said. He explained this with the fact that one of the reasons why it pays for banks to operate in Croatia is high loan demand and slightly higher interest rates than in the euro-zone. Those banks earn very high profits, their profit rate is three times higher than those in the EU, which is why it pays for them to seek loans and then grant loans, exerting pressure on the appreciation of the exchange rate, he said. Rohatinski warned about the growth of foreign debt which currently totals 15.2 billion dollars. President Mesic said there was still no reason to worry about the amount of the debt, except if it continued to grow at the current pace. (hina) rml sb