ZAGREB, Feb 13 (Hina) - The Croatian National Bank (HNB) Council on Wednesday discussed the latest monetary and economic developments at a session held under the chairmanship of governor Zeljko Rohatinski, the HNB said.
ZAGREB, Feb 13 (Hina) - The Croatian National Bank (HNB) Council on
Wednesday discussed the latest monetary and economic developments
at a session held under the chairmanship of governor Zeljko
Rohatinski, the HNB said. #L#
After the end of last year saw an annual inflation rate of 2.6
percent, retail prices this January increased by 0.8% as against
the month before and by 3.3% as against January last year. The
January increase in prices was mostly the result of an increase in
the prices of agricultural products, beverages, oil products and
some administratively regulated services. Retail prices which are
included in the calculation of inflation were only 0.2% higher in
January as against December and 1.9% higher than a year ago.
Monetary movements in the last quarter of 2001 were marked by a
significant rise in citizens' foreign currency deposits, which
culminated in December. This trend was triggered to a great extent
by the exchange of 12 European currencies for the euro. However,
according to available indicators, the deposits were not drawn from
bank accounts early this year. On the contrary, there are
indications that foreign currency savings in banks, increased by
two billion euros, have continued to increase slightly or are
stagnating.
It is expected, especially considering low interest rates on
foreign currency deposits abroad, that the banks' interest in
issuing loans on the domestic market will increase. If the trend of
decreasing interest rates continues, loan demand will increase.
Interest rates on loans have already dropped in the last quarter of
2001 to around 5.4% for short-term and around 7.5% for long-term
loans. Interest rates on long-term loans for citizens have been
decreasing as well.
The HNB expects that the already evident appreciation pressures
will increase. A 2.7% drop in the value of the kuna as against the
euro and a 4.6% drop in value as against the dollar in January has
been replaced by a trend of increase in the value of the national
currency.
Under such circumstances, the most important issue for the central
bank will be how to maintain the stability of prices even with the
increased credit activity of the banks.
(hina) sb rml