At the meeting held on Wednesday, April 10 2002, the Council of the Croatian National Bank, chaired by the Governor, Dr Željko Rohatinski, reviewed recent monetary and economic developments, adopted the monetary projection for the second quarter of the current year, the report on international reserves management and the CNB financial statements for 2001. The Council also made a number of decisions acting in accordance with its authority.

In March, monthly inflation was 0.4 percent and the year-on-year inflation 3.2 percent. The stability of the exchange rate was preserved, with stronger appreciation pressures that induced two central bank interventions on the foreign exchange market, resulting in a total purchase of EUR 237.9 million. In the meantime, the monetary effects of these interventions and of the liquidity loan granted to Riječka banka were successfully neutralized. Corporate and household lending rates have continued their downward trends. Commercial banks net foreign assets are falling, while net domestic assets are on the rise. Foreign currency deposits data indicate that the withdrawal of deposits from Riječka banka did not cause a similar reaction of other banks' depositors, but also that high growth rates of foreign currency deposits, induced by the introduction of the euro, have slackened.

Considering high liquidity of the banking system, the level of money market interest rates and the fall of interest rates on CNB and Treasury bills, the CNB Council decided to reduce the annual Lombard rate from 10 to 9.5 percent. The change in this reference rate should stir the reduction of interest rates on the market, thus relieving the appreciation pressures on the kuna. Having in mind the same goal, the Council reduced the remuneration rate on kuna reserve requirement from 2 to 1.75 percent.

At the end of 2001, total international reserves of the Croatian National Bank amounted to USD 4.67 billion, which is 1.15 billion more than at the end of the previous year. Such increase was largely fuelled by the purchase of foreign currency from commercial banks (USD807 million), but it was also the result of foreign currency purchases from the Ministry of Finance, the rise in foreign currency denominated CNB bills, inflow of gold and foreign currency resulting from the resolution of certain succession issues, and, finally, of the income from the international reserves investment. The increase in central bank international reserves would have been even higher if commercial banks had not purchased foreign currency from the central bank at the same time (about USD 424 million) and if there had been no negative effects of intercurrency relations, mostly those related to the weakening of the euro against the US dollar.

The Council of the Croatian National Bank assessed that six savings banks, which applied for licenses to perform banking activities listed in Article 35 of the Banking Law, have fulfilled the necessary preconditions for their transformation into banks. Thus, the Council issued an approval to Krapinska štedionica d.d. to become Zagorska banka d.d. Krapina, to Križevačka štedionica d.d. to become Križevačka banka d.d. Križevci and to Štedionica Brod d.d. to be transformed into Banka Brod d.d. Slavonski Brod. Pursuant to the Council's approval, Štedionica splitsko-dalmatinska d.d. may also operate as Splitsko-dalmatinska banka d.d. Split and Varaždinska štedionica Kovanica d.d. as Banka Kovanica d.d. Varaždin.

Preconditions for the transformation into a bank have also been met by Prva obrtnička štedionica d.d. Zagreb. However, its owner Siegfried Rudolf Einhellig, who was given approval for acquiring 100 percent of voting shares in Hypobanka d.d. Zagreb at the Wednesday meeting of the Council, decided to merge this savings bank with Hypobanka. The merger was also approved. Considering its connection with current shareholders of Primorska banka d.d. Rijeka, a company named Cofisi S.A from Luxembourg applied for an approval for acquiring 2.43 percent of voting shares in that bank. The Council approved the acquisition of the stake. Bank Austria AG Vienna was granted approval for acquiring 25 percent of voting shares in Wüstenrot housing savings bank.

The Council of the Croatian National Bank agreed to the nominations of Ms. Zdravka Cukon for chairwoman of the management board of Privredna banka Zagreb - Laguna banka d.d. Poreč and Mr. Marijan Marušić for member of the management board of Podravska banka d.d. Koprivnica.