According to available economic indicators, the last quarter of 2005 was marked by mostly positive developments in the real economic sector. The physical volume of industrial production in December was 6.9 percent higher than in December 2004, which resulted in a 5.1 percent growth on the annual level in 2005.
The annual rate of growth of consumer prices dropped from 3.8 percent in November to 3.6 percent in December, and the annual inflation rate from 3.1 to 3.0 percent.
Bank loans to the non-banking sector continued their strong growth. With an annual growth rate of 17.2 percent in December, total bank loans to the non-banking sector at the end of last year reached 149.2 billion kuna.
Of that amount, 78.6 billion were household loans, which last year saw an annual growth rate of 20.3 percent. Loans to the business sector grew at an annual rate of 14.3 percent. Total bank loans continued growing in January 2006 as well, rising by 17.9 percent in relation to January 2005.
Having in mind these developments, the HNB Council decided to introduce statutory reserves which banks will have to set aside for issued securities.
The base for the calculation of statutory reserves is the increase of the average daily issue of securities in a given period of time in relation to the average daily issue of securities in the period from 1 to 31 January 2006. Statutory reserves will have to be set aside as of March.
The rate of special statutory reserves is 55 percent, which is sufficiently high to discourage banks from seeking loans by issuing securities, the Council said. If this decision does not produce satisfactory results, the HNB will take new measures, the Council said.