ZAGREB, April 3 (Hina) - As a result of significant inter-currency changes, the Croatian National Bank (HNB) will incur a book loss for 2002 concerning assets which are tied to the dollar exchange rate and whose value is expressed in
the kuna.
ZAGREB, April 3 (Hina) - As a result of significant inter-currency
changes, the Croatian National Bank (HNB) will incur a book loss for
2002 concerning assets which are tied to the dollar exchange rate
and whose value is expressed in the kuna. #L#
The HNB will cover the loss with its own reserves.
Because of the currency structure of Croatia's financial
obligations towards other countries, one third of the foreign
exchange reserves, amounting to 5.9 billion dollars, is kept in the
US dollar. Last year, the dollar dropped by 15 percent in relation
to the euro and kuna. At the end of 2001 one dollar was equivalent to
8.36 kuna as against the end of 2002, when one dollar was worth 7.15
kuna.
This caused the book loss in that segment of the assets, the HNB
explained.
It was not possible to completely neutralise the loss with the
realised yield from the total foreign exchange reserves because of
a fall in interest rates on world markets.
The HNB said on Thursday the said loss would not be an additional
burden on the state budget, as central banks usually form their own
reserves for such situations. Thus the HNB will cover its book loss
with its own funds.
HNB analysts have reminded that the dollar appreciated against the
euro at the start of this year, yielding a positive impact on the
business indicators of the central bank.
They, however, say it is now impossible to forecast further trends
until the end of this year.
(hina) ms sb