One of the tasks of the Croatian National Bank is to formulate and execute monetary and foreign exchange policies. For the purpose of achieving the formulated monetary and foreign exchange policies, the CNB may adopt measures and instruments needed to regulate credit activity and liquidity of banks and money supply and to institute measures for the interest rates and the exchange rate of the domestic currency. The CNB is authorized to pass subordinate legislation and other enactments to regulate foreign exchange operations of juridical and natural persons and to perform foreign exchange control in the Republic of Croatia. The Croatian National Bank is also authorized to adopt methods for setting the value of the kuna against other currencies.

For the purpose of implementing the established monetary and foreign exchange policies, the Croatian National Bank may issue its own securities denominated in domestic or foreign currency and may enter into agreements on purchasing, selling and exchanging securities and other readily marketable financial instruments as well as rights and obligations related to and arising from them.

The Croatian National Bank may grant credits to solvent banks with a head office in the Republic of Croatia for periods not exceeding six months. Instruments of collateral that may be used for those loans include financial instruments as defined by the Law on the Croatian National Bank, debt instruments issued by the Croatian National Bank or the Republic of Croatia, payable in Croatia and constituting a part of the public issue, and debt instruments stipulated by the Law on the Croatian National Bank.

Interest rates for discounts and loans of the Croatian National Bank are determined in a separate decision of the Croatian National Bank. The Croatian National Bank also obliges the banks to set aside and maintain reserve requirements in the settlement account and in the vault or in a separate account with the Croatian National Bank. Reserve requirements are defined as a percentage determined with regard to the type, maturity, and size of deposits as well as increase in deposits and other liabilities of a bank. The decision on reserve requirements also provides a definition of the calculation base and the manner of calculating reserve requirements. The Croatian National Bank may choose to remunerate banks for their reserve requirements set aside and the amount of remuneration paid is prescribed by the Croatian National Bank.