CENTRAL BANK COUNCIL ON ECONOMIC TRENDS, POLICY...

ZAGREB, May 8 9Hina) - The council of the National Bank of Croatia convened today under the chairmanship of Governor Marko Skreb. The meeting approved the financial statements for 1995 and discussed economic trends and monetary-policy measures, the Bank said in a statement on Wednesday. Prices in Croatia were stable. From January to April, retail prices firmed 0.3 percent and living costs edged up 1.4 percent, the meeting heard. The kuna exchange rate was also stable with minor oscillations - a slight appreciation as compared with the German mark, accompanied by a simultaneous depreciation as compared with the US dollar and the Italian lira. The liquidity of the banking system was satisfactory on the whole, as indicated by the latest increase in the voluntary buying of T-bills, even by banks who had been the most insistent in pressuring the central bank for the sale of foreign currency owing to a lack of kuna. After an exhaustive debate, the Council unanimously agreed that the main goal of the Croatian central bank remained a stabilisation-oriented monetary policy. Central bank measures should adapt to changes in the financial system and the business sector, but in a way that would not jeopardise the stability of prices and the national currency, the meeting agreed. Monetary expansion would not resolve the basic problems of the banking sector and economic growth and could spur on inflation. The council issued a licence to Hypo banka d.d., founded by the Kartner Landes- und Hypothekenbank AG, based in Klagenfurt, Austria. (hina) as 081849 MET may 96