ZAGREB, Dec 18 (Hina) - Projections of the monetary policy for 2004, which envisage a 10-percent rise in money supplies and a 14-percent rise in bank loans, which would be in line with the planned economic growth of four percent, are
the continuation of the Croatian National Bank's (HNB) restrictive monetary policy.
ZAGREB, Dec 18 (Hina) - Projections of the monetary policy for 2004,
which envisage a 10-percent rise in money supplies and a 14-percent
rise in bank loans, which would be in line with the planned economic
growth of four percent, are the continuation of the Croatian National
Bank's (HNB) restrictive monetary policy.#L#
The central bank does not expect any significant increases in interest
rates of commercial banks.
The projections for 2004 were drafted on the assumption that the state
fiscal deficit will continue decreasing. However, it remains to be
seen what kind of fiscal policy the new government will carry out and
whether any new stand-by arrangement will be concluded between Zagreb
and the International Monetary Fund, the central bank's top officials
told a news conference at which they commented on decisions adopted at
a session of the HNB Council on Wednesday.
The monetary policy for next year starts from the need to maintain a
low inflation rate and the stability of the kuna exchange rate. The
advice is to reduce the deficit in the balance of payments and slow
down the rise in the country's foreign debt, which reached 20.8
billion US dollars in late October, increasing by 35.4 percent since
the end of 2002.
At the beginning of 2003, measures were introduced to limit the rise
of the volume of bank loans to 16 percent, which was achieved as the
volume of granted loans rose to 15 percent. The year is closing with
measures which are seen as continuation of the restrictive policy.
The central bank's governor, Zeljko Rohatinski, reiterated that the
IMF praised the HNB for the results of its moves in the monetary
sphere, which contributed to a lower deficit in the balance of
payments in relation to 2002. There was, however, a lack of adequate
fiscal measures.
As regards the question of whether the country needs a stand-by
arrangement with the IMF, in which the government has a final say,
Rohatinski said that the central bank had been maintaining since 2001
that it did not need a stand-by arrangement, but the country as a
whole probably did.
In 2004, the central bank plans to make less interventions on the
foreign currency market and will not buy all the state's foreign
debts, but will cover them only to the amount of up to 200 million
dollars. The advice for the new government is to orientate itself more
towards the domestic market when it needs to take loans.
(Hina) ms sb