ZAGREB, May 16 (Hina) - The Croatian National Bank (HNB) Council decided at Wednesday's session, which was chaired by HNB Governor Zeljko Rohatinski, that the rate of compulsory bank reserves would be reduced from 23.5 to 22 percent
and that the base for the calculation of compulsory currency reserves would be increased to include received currency loans to 11 percent. This means that as of July 9, there will be not only a single, lower rate of compulsory reserves but also a harmonised base for the calculation of compulsory kuna and currency reserves, the HNB reported. These measures are part of the second stage of unification of compulsory kuna and currency reserves, which started last September. The central bank has also taken into account its second long-term goal - the reduction of the rate of compulsory reserves. Given the current situation, the reduction could not be bigger considering the n
ZAGREB, May 16 (Hina) - The Croatian National Bank (HNB) Council
decided at Wednesday's session, which was chaired by HNB Governor
Zeljko Rohatinski, that the rate of compulsory bank reserves would
be reduced from 23.5 to 22 percent and that the base for the
calculation of compulsory currency reserves would be increased to
include received currency loans to 11 percent.
This means that as of July 9, there will be not only a single, lower
rate of compulsory reserves but also a harmonised base for the
calculation of compulsory kuna and currency reserves, the HNB
reported.
These measures are part of the second stage of unification of
compulsory kuna and currency reserves, which started last
September. The central bank has also taken into account its second
long-term goal - the reduction of the rate of compulsory reserves.
Given the current situation, the reduction could not be bigger
considering the need to keep the inflation rate under control,
however, it is expected another step could be made toward lowering
compulsory reserves by the end of this year.
These decisions, which are aimed at alleviating the current
pressure on the kuna exchange rate, have been prompted by the latest
developments on the currency market. Namely, these measures will
have a dual effect on currency reserves: the decrease of the
allocation rate will lessen this obligation but since the base for
the calculation of currency reserves is extended, this will
ultimately result in a net increase in compulsory currency reserves
of some 2.3 billion kuna. It is estimated that simultaneously, as a
result of the decreased allocation rate, some 320 million kuna will
be released from compulsory kuna reserves. This means that the
offer on the currency market will drop, and kuna liquidity will be
sufficient for the successful continuation of the banks' credit
activities and the further perking up of the economy, without
undesired pro-inflation effects.
(hina) sb rml