ZAGREB, Dec 9 (Hina) - The Croatian National Bank (HNB) Council on +Wednesday held a session at which it stated the HNB's task in 1999 +was to ensure a balanced stability of prices and the exchange rate, +with a satisfactory level of
domestic liquidity and foreign +solvency.+ The HNB was to achieve that by acting in a smaller manoeuvre area +created by the fiscal policy when access to foreign capital is +difficult.+ The HNB Council also discussed the latest economic and financial +trends as starting points for monetary trends in 1999.+ According to a statement issued by the Council, the economic +circumstances in which monetary frameworks for 1999 were being +determined were characterised by a satisfactory stability of +prices and of the exchange rate.+ In November, retail prices rose by 0.2 percent, or by 5.9 percent on +the annual level. The exchange rate was stabilised, between 3.73 +and 3.74 C
ZAGREB, Dec 9 (Hina) - The Croatian National Bank (HNB) Council on
Wednesday held a session at which it stated the HNB's task in 1999
was to ensure a balanced stability of prices and the exchange rate,
with a satisfactory level of domestic liquidity and foreign
solvency.
The HNB was to achieve that by acting in a smaller manoeuvre area
created by the fiscal policy when access to foreign capital is
difficult.
The HNB Council also discussed the latest economic and financial
trends as starting points for monetary trends in 1999.
According to a statement issued by the Council, the economic
circumstances in which monetary frameworks for 1999 were being
determined were characterised by a satisfactory stability of
prices and of the exchange rate.
In November, retail prices rose by 0.2 percent, or by 5.9 percent on
the annual level. The exchange rate was stabilised, between 3.73
and 3.74 Croatian kuna for one German mark, thus reducing central
bank intervention on the foreign currency market.
The foreign trade and balance of current accounts deficit was
reduced. In the first ten months of 1998, export increased by 9.5
percent in dollar and 14.3 percent in kuna accounting.
In comparison to the same period of time in 1997, import was reduced
by 1.9 percent in dollar accounting, and was increased by 1.8
percent in kuna accounting.
Croatia's economic circumstances were also characterised by a
growth in salaries. In the first ten months of 1998, net salaries
were 12.8 percent nominally, and 5.7 percent realistically higher
than last year.
Other characteristics include slowness in economic activity, a
high unemployment rate, the growth of unpaid orders of transfers,
and the repeated growth of interest rates and interest margins.
The HNB Council decided to increase the interest rate on collateral
loans from 11 to 12 percent. If the used loan is returned within the
same day, the interest will be accounted at a rate of seven
percent.
The Council explained this was an attempt to incite banks to pay
more attention to the administration of their own liquidity and the
debiting with the central bank, primarily for short-term and
passing disturbances in liquidity.
Also expanded was the possibility of short-term debiting with the
central bank, in order to facilitate the banks' adjustment to
liquidity oscillations, with less negative effects on interest
rate movements, and also to adjust to the investors' overreactions
to the merest indications of an even passing fall in a bank's
liquidity.
(hina) ha jn