HNB: GOVERNOR DID NOT SAY HE WOULD RESIGN

ZAGREB, May 7 (Hina) - The Croatian National Bank's (HNB) governor, Zeljko Rohatinski, did not say he would resign before elections, said the governor's office in a statement Wednesday. The office reacted to an article in the latest issue of Globus weekly. #L# On its cover, Globus says Rohatinski is resigning and does not wish to continue being responsible for the consequences of the government's policy of foreign indebtedness. In the published interview with Rohatinski, headlined "No, Prime Minister: I Am Resigning", is a sentence which reads "I will withdraw before elections". This is not a sentence given by Rohatinski, it was added to the interview by the weekly, says the HNB, adding the interview was authorised prior to being published and it contained no such sentence. About two weeks ago, the central bank warned about the growth of foreign debts which reached some US$16.5 billion at the end of February, and about the deficit of the balance of payments current account. Rohatinski said then that his personal opinion was that under the current circumstances in the country, a further increase in foreign debts or their retaining the current share in GDP could not end without negative consequences. In the interview to Globus, Rohatinski stressed that the state was liquid and could pay off all of its debts regularly, as well as that the HNB's foreign exchange reserves amounted to $6.5 billion in late April. Overall available assets in the banking system are some $10 billion, a solid guarantee for foreign creditors, he said. "So, the HNB's warnings about the increase in foreign debts were not motivated by the current concern for the country's external liquidity. We primarily tried to point to the unfavourable effects of the expansion of domestic consumption financed by banks' foreign loans on relations in the balance of payment, as well as its potential effects on the internal stability of the financial system," Rohatinski said in the interview. (hina) lml sb