Stable exchange rate, growing exports

Published: 17/11/2004

The main indicators of the current economic and financial developments point to a boost in exports and a curbed external debt growth. This was concluded at today's meeting of the Croatian National Bank Council chaired by the Governor, Dr Željko Rohatinski.

In the first nine months of the current year, exports, expressed at the fixed exchange rate from 2002, increased by a high 21.2 percent compared with the same period last year. If shipbuilding is excluded on account of its pronounced cyclical influence on the indicators, the increase was 17.2 percent. Having in mind the two-digit, but considerably lower last-year's growth rate, this may be a sign of desirable structural changes in the economy, which facilitate the inclusion in the international trade flows. It is particularly important that such a growth in exports was achieved in an environment of stable domestic prices (the annual inflation rate measured by consumer prices was 2.0 percent in October) and a stable domestic currency exchange rate (whose fluctuations eased after the end of the tourist season, although the central bank did not intervene in the foreign exchange market during the last two months).

In September and October, banking system liquidity improved and the weighted monthly average interest rates on the Zagreb Money Market fell from 6.67 percent in September to 3.77 percent in October. Bank placements only grew in nominal terms in September, so that their annual growth rate was around 12.5 percent, as in the previous months. External borrowings of banks declined by about EUR 100 million at the end of September compared with end-August.

At the meeting, the CNB Council also adopted a decision on the construction and use of the international bank account number (IBAN) to be used in external payment operations. The use of such a number is obligatory in all EU Member States and is being introduced in the countries which intend to join the European Union. The use of the IBAN ensures faster processing and lower costs of payment orders.

The CNB Council also approved the appointments, proposed by the Supervisory Board of Hrvatska poštanska banka, of Mr. Josip Protega for chairman of the Management Board and Mr. Ivan Sladonja for member of the Management Board of the bank.