ZAGREB, Sept 21 (Hina) - Officials at the Croatian National Bank have assessed that inflation would remain under control notwithstanding the price increase for power supply as of October 1, and should inflation pressures occur, the
Bank will react with adequate measures. The HNB also said that, despite claims by political factors, the Bank would use all available means to maintain the stability of the currency at its present level. Croatian Prime Minister Ivica Racan told Croatian Radio on Tuesday the Government would not allow inflation or devaluation, but the kuna currency exchange rate would become more realistic long-term. HNB officials estimate that by allowing a depreciation of the exchange rate damage would occur, and would not allow for a solution of any problem. Political factors have the right to a different opinion, but do not have the instruments to implement currency policy,
ZAGREB, Sept 21 (Hina) - Officials at the Croatian National Bank
have assessed that inflation would remain under control
notwithstanding the price increase for power supply as of October
1, and should inflation pressures occur, the Bank will react with
adequate measures.
The HNB also said that, despite claims by political factors, the
Bank would use all available means to maintain the stability of the
currency at its present level.
Croatian Prime Minister Ivica Racan told Croatian Radio on Tuesday
the Government would not allow inflation or devaluation, but the
kuna currency exchange rate would become more realistic long-
term.
HNB officials estimate that by allowing a depreciation of the
exchange rate damage would occur, and would not allow for a solution
of any problem.
Political factors have the right to a different opinion, but do not
have the instruments to implement currency policy, the officials
stressed.
As regards various assessments made in the public about inflation
trends, data show that retail prices were in the first eight months
of this year increased by 5.5 per cent in relation to the same period
last year. That is to say, the prices rose monthly by 0.7 per cent,
while during previous years monthly inflation grew by 0.5 per cent.
This gave rise to estimates about a rise in inflation and the
question when the trend would end.
It is factual that more than a half of the average growth is the
result of increased prices of oil products (twice) and excise
taxes.
The issue, therefore, is about the influence of the environment and
fiscal policy, on which monetary policy has no influence.
Experts of the Croatian National Bank have estimated that these
pressures had mostly "blown over" in the last seven months, as
retail prices in August have remained at their July level.
The price of petrol and excise taxes have increased the overall
level of prices, but this has not shed off onto other prices.
(hina) lml jn