HNB GOVERNOR NEGOTIATES STAND-BY ARRANGEMENT AND TWO LOANS

WASHINGTON, April 29 (Hina) - Croatia is negotiating with the International Monetary Fund (IMF) a new one-year-long stand-by arrangement valued approximately 200 million dollars, said Croatian National Bank's (HNB) Governor, Marko Skreb, on Wednesday. Skreb has led a Croatian delegation to the spring session of the IMF and the World Bank in Washington. Croatian officials have used this occasion for continuing bilateral talks on Croatia's ties with these two financial institutions. The money, which will be ensured by the new IMF stand-by arrangement, should be used, as usual, for the international reserves of the Croatian Central Bank. Skreb discussed the matter with the first deputy of IMF executive director, Stanely Fischer. The IMF pointed to the necessity of "the fiscal adjustment not only of the budget but also of the pension and public health funds," Skreb said adding that Croatia was asked to revise the budget. He stressed that Croatia was negotiating with the Fund a usual arrangement under standard conditions. He thus rejected some speculations that negotiations with the IMF could be easier due to consequences of the Kosovo crisis. "This is neither a donors' conference nor compensation for Kosovo," Skreb commented. He announced the arrival of an IMF mission in Croatia for the first half of May. Skreb and World Bank officials discussed the second instalment of the so-called EFSAL loan, the total value of which is 160 million German marks. A half of the loan has already been realised. They also considered a loan for the structural adjustment, called SAL. Skreb said by this money from the World Bank Croatia could ensure the payment of saving deposits from six banks that are going into bankruptcy and for which the state stands surety. Negotiations will resume in Zagreb in May. (hina) ms