The depreciation of the kuna would be a blow to the living standards of the population, which would then push many debtors into bankruptcy. Imported energy products would become more expensive, which would consequently increase living costs and thwart domestic production, the SSSH chief economist Mario Svirig said on Tuesday.
The exchange rate of the kuna should not be determined by administrative measures but should depend on supply and demand, Svirig said.
Besides, calls for the devaluation of the kuna sends a message to investors not to invest in the kuna-denominated bonds, shares and other assets, and is totally contrary to rules regulating the country's accession to the European Monetary Union.
Experiments with devaluating the national currency are not carried out anywhere in the world except in situations in which countries such as Argentina and Brazil found themselves a few years ago, and all of this would make it impossible for Croatia to join the ERM 2, the currency system for new European Union members, he warned.
"The high-quality Croatian product can be sold everywhere in Europe, so demands for the kuna's depreciation come from interest groups whose products are not competitive," Svirig said.