The Council of the Croatian National Bank, at its session today, adopted the decision by which it facilitates the use of the reserve requirement allocation within a specific period under special conditions. Banks will have to justify the reasons for the use of such funds to the central bank, and the CNB will calculate and charge interest to them for the amount of the reduced maintained and/or allocated reserve requirements.
The interest rate will be equal to the Lombard rate increased by 1 percentage point in using this source of liquidity up to three months, and in the event of a longer use, the interest equal to the Lombard rate increased by 2 percentage points will be charged.
Having regard to the downward trend of interest rates in the money market, the CNB Council at the same time decided to reduce the Lombard rate from the previous 9% to 6.25%.
Both decisions shall enter into force on the day of their publication in the Official Gazette.