CNB Council: Highly expansionary monetary policy maintained in the second half of 2020

Published: 16/12/2020

At its session today, the CNB Council discussed current economic and financial developments and adopted the monetary policy projection from 2020 to 2023, Macroeconomic Developments and Outlook and the CNB’s Financial Plan for 2021.

In the second half of 2020, the CNB maintained a highly expansionary monetary policy ensuring favourable domestic financing conditions and maintaining the stability of the exchange rate of the kuna against the euro. Banks’ free reserves thus reached a record high in November, which contributed to keeping most interest rates at historical lows, similar to those before the pandemic outbreak. In the first ten months, household lending slowed down, mostly because of the decline in general-purpose cash loans. Following a strong growth in the first quarter, from April to October, credit activity directed towards corporations was subdued.

The CNB Council also adopted several decisions within its competence, among others, the decision to approve the proposal of the Supervisory Board of Addiko Bank to appoint Mario Žižek as President and Dubravko-Ante Mlikotić, Ivan Jandrić and Joško Mihić as Members of the Management Board. The CNB Council also approved the proposal of the Supervisory Board of J&T Bank to appoint Petar Rajković as Member of the Management Board.

In addition, the CNB Council adopted the decision to appoint Sandra Švaljek, CNB Deputy Governor, Martina Drvar, CNB Vicegovernor, Bojan Fras, CNB Vicegovernor and Vedran Šošić, CNB Chief Economist, as members of the Financial Stability Council on behalf of the CNB.