KUNA, PRICES STABLE THIS YEAR - SAYS NATIONAL BANK GOVERNOR

ZAGREB, Feb 4 (Hina) - The Croatian National Bank (HNB) will not change the currency rate regime in 2000, and the rate of the national currency, the kuna, will remain relatively stable in relation to the euro, HNB governor Marko Skreb said on Friday. The aim of the HNB is also to maintain a low inflation rate, so prices this year could rise by a maximum 3.8 percent, said Skreb addressing "Croatia's Monetary Policy in 2000", a Zagreb conference gathering directors of banks and savings banks. Skreb said economic trends in Croatia greatly depended on trends in the world, especially in Europe. While last year Croatia's Gross National Product (GNP) recorded a 1.5 percent drop, this year tourism should greatly contribute to an expected raise of about three percent. This year the M4 monetary aggregate, which consists of foreign and domestic currency deposits and money supplies, could increase by more than 9.4 percent, Skreb said. He announced a drop in the balance of payments deficit from 7.7 percent in 1999 to seven percent this year. This is not considered to be a issue due to expected capital influx, he added. Skreb does not expect problems in settling Croatia's foreign debt, which last year amounted to US$9 billion. The consolidation of the banking system will continue throughout the year, Skreb said, adding the HNB planned on undertaking controls in 40 banks, 35 less than in 1999. There are 53 banks and 34 savings banks in Croatia at present, which is 12 less than last year. Their number will continue to decrease, in keeping with world trends, Skreb said. He announced the completion of a domestic payments reform, as part of which a national clearing system could start functioning in April. The HNB intends to propose to the government a new HNB Law. (hina) ha