ZAGREB, May 3 (Hina) - This year's monetary policy will not change, its goal is low inflation, Croatian National Bank vice-governor Relja Martic said on Friday.
ZAGREB, May 3 (Hina) - This year's monetary policy will not change,
its goal is low inflation, Croatian National Bank vice-governor
Relja Martic said on Friday. #L#
This year's monetary policy is a logical continuation of last
year's policy and is aimed at maintaining a low inflation rate.
The state will conduct such a monetary policy that maintains the
relative stability of the exchange rate, Martic said at the seminar
"Monetary Policy in 2002", organised by the Croatian Banking and
Insurance Institute.
The HNB's aim in 2002 is an inflation rate of 3-4 percent, Martic
said, adding that in case inflation pressures increased, the bank
would undertake adequate measures. The danger of inflation
pressures comes from the price of energy products, however, Martic
believes the announced changes in the price of gas and electricity
should not be such to cause major problems.
This year Martic expects a greater influx of foreign currency from
privatisation revenues, foreign loans for road construction,
tourism revenues, and the currency restructuring of the banks'
active assets (part of foreign currency will return from foreign to
domestic markets). Martic believes the central bank will be
sufficiently present on the foreign currency market and that it
would intervene in case the value of the kuna increased
significantly.
Speaking about the instruments and measures of the monetary policy,
Martic announced possible changes in banks' obligatory reserves at
the HNB and with regard to treasury notes. Although middle-term
plans envisage a reduced rate of obligatory reserves, it could
easily happen that no decrease in the rate is requested. Should
pressures on the exchange rate and trends on the foreign currency
market require it, the central bank might even consider increasing
the percentage of the foreign currency part of obligatory kuna
reserves (which now amount to 25 percent).
With regard to treasury notes, Martic announced a switch to weekly
auctions (auctions are currently held every five weeks) and the
cancellation of maturity of 70 and 105 days, which will leave only
due dates of 35 days.
A new law on banks should be adopted soon, and a law on foreign
currency is being prepared, Martic said, adding that the latter
should not go into force this year. The law on foreign currency
envisages the gradual liberalisation of capital transactions,
vice-governor Adolf Matejka said.
HNB officials informed the gathered bankers about this year's
economic growth rate of 3.5 percent, adding that the banks'
reserves this week exceeded five billion US dollars.
(hina) rml sb