The Croatian National Bank Council today adopted a decision to increase the bank reserve requirement rate from 14 to 15 percent and to implement an additional reserve requirement calculation on 27 January 2012.
This central bank measure is aimed at withdrawing approximately HRK 3.1bn from the banking system (HRK 2.6bn from the kuna component and HRK 0.5bn from the foreign exchange component of reserve requirements).
The purpose of withdrawing excess liquidity from the system is to stabilise the kuna/euro exchange rate, i.e. to counter depreciation pressures. The additional calculation is implemented in order for the rate increase to produce an effect on exchange rate stabilisation in the shortest possible time.
The central bank will continue to monitor developments in the money and foreign exchange markets, taking measures, as necessary, to curb excessive exchange rate fluctuations not based on real economic movements.