At its session today, the CNB Council adopted a decision to reduce the reserve requirement rate from 15% to 13.5% and exclude the funds received from five multilateral development banks from the calculation base. As already announced, the aim of this measure is to release to banks an approximate amount of HRK 4.1bn from the kuna component and slightly over EUR 110m from the foreign exchange component of reserve requirements. The decision will apply as of the following reserve requirement calculation date of 9 May.

The decision was made under the assumption that banks will, in cooperation with the Croatian Bank for Reconstruction and Development, use the HRK 4bn released and an equal amount of funds from their other sources to promote economic recovery, channelling the bulk of this amount into programmes to improve the country's balance of payments, on lending terms more favourable than those previously offered in the market.

This measure, the latest in a series of central bank measures taken in the past few years to stimulate economic recovery, is expected to produce results already at the end of this year and take full effect next year. However, for that to be achieved, without undesirable consequences for exchange rate and price stability, the programme requires maximum effort on the part of all other participants and an adequate support of economic policy.

Also at today's session, the CNB Council adopted the central bank's annual report for 2011 and fundamental monetary policy guidelines for this and the following year, based on available indicators and forecasts of domestic and international economic developments.

Privredna banka d..d. Zagreb was granted approval to merge with Međimurska banka d.d., Čakovec. As Privredna banka was already the sole owner of Međimurska banka, this move only involves a reorganisation and the streamlining of operating expenses, with no changes in ownership. The CNB Council also approved the reappointment of Julije Kuruc as Chairman and Marijan Marušić and Davorka Jakir as Members of the Management Board of Podravska banka d.d., Koprivnica, of Dubravka Lukić as Member of the Management Board of Volksbank d.d., Zagreb, and of Marija Posavec as Management Board Member at Prva stambena štedionica d.d., Zagreb.