CNB Council:

New monetary policy measures

Published: 5/9/2001

At the meeting held on Wednesday, September 5, 2001, the Council of the Croatian National Bank, chaired by the Governor, Dr Zeljko Rohatinski, reviewed recent economic and monetary developments and the management of international reserves in the first half of this year. The Council also decided to amend several central bank interest and remuneration rates. Further, the Council made a number of other decisions, acting in accordance with its authority, including the decision on entering the final stage of kuna and foreign currency reserve requirement unification.
The CNB Council assessed that the exchange rate pressures have dissipated in the past few days due to the central bank interventions on the foreign exchange market. Since interest rates on the money market grew considerably during the last month, and some banks also took Lombard loans which were - under current market conditions and expectations - perceived as a relatively cheap source of finance, the Council decided to increase the Lombard rate from 9.5 percent to 10.5 percent.
Since banks' rates on kuna deposits have been trending downwards for a longer period of time (they amounted to 3.73 percent on average in March this year to fall to an average 3.10 percent in July), the Croatian National Bank reduced the remuneration rate on the allocated kuna reserve requirement from 3.5 to 2 percent.
The CNB Council also decided to initiate the next, already announced phase of the unification of the reserve requirements aiming at the currency unification of the allocated reserve requirements. This will be a gradual process. Thus, 10 percent of the accrued foreign currency reserve requirement will have to be allocated in kuna as of September 10, 2001. On October 8, 2001 (the next accrual period), additional 10 percent will have to be allocated in the domestic currency. Further rate of increase in the reserve requirement percentage accrued on foreign currency calculation base and allocated in kuna will be determined in due course, depending on the realization of the monetary policy projection and its goals.
Privredna banka Zagreb d.d. was given approval for acquiring up to 100 percent of voting shares in Hrvatska stambena štedionica d.d. Varaždin. Mr Siegfried Rudolf Einhelig, who owns a majority stake in Prva stambena štedionica d.d. Zagreb, was granted the approval for acquiring additional shares in that savings bank, which will make it possible for him to increase his stake to 99.99 percent.
At the Wednesday meeting, the Council of the Croatian National Bank approved the nomination of Mr Karl-Heinz Truskaller for chairman of the management board of Hypo Alpe-Adria Bank d.d. Zagreb and Ms Vlasta Žubrinić-Pick for member of the management board of Raiffeisenbank Austria d.d. Zagreb.