At its today's session, the Council of the Croatian National Bank examined recent monetary and economic developments and adopted several decisions on matters falling within its competence.

Growing uncertainty and the fear of the rapid spread of the coronavirus pandemic and the measures introduced to contain the pandemic resulted in a very high volatility on the international financial markets towards the end of February and in March 2020. Increased pressures on the exchange rate and the securities market marked the developments in developed countries and emerging market economies, Croatia included. At the end of March, the EUR/HRK exchange rate rose by 2% from the end of February and yields to maturity on government bonds and the risk premium also rose during that period. From the beginning of March, the CNB took a number of monetary policy measures, maintaining the liquidity and stability of the financial system. In five interventions in the foreign exchange market and several direct transactions in March, the CNB sold to the banks a total of EUR 2.5bn. In the same month, the central bank conducted a structural operation, placing HRK 3.8bn to the banks, in addition to placing a total of HRK 1.85bn to the banks at the regular weekly operations. The central bank also reduced the reserve requirement rate from 12% to 9%, thus increasing the banks' free reserves with the CNB by HRK 6.33bn. To maintain stability in the government bonds market, in March, the CNB purchased securities of the Republic of Croatia worth nominally HRK 4.29bn.

The annual growth in bank placements accelerated in February to 4.8%, driven by the acceleration in the growth of placements to non-financial corporations, while the annual growth of placements to households slowed down slightly. According to monthly data of the Ministry of Finance, in January 2020, the central government budget ran a deficit of HRK 1.3bn, in contrast with the small surplus recorded in the previous year. Reflecting the favourable effect of the growth in nominal GDP, the general government debt to GDP ratio fell from 74.7% of GDP at the end of 2018 to 73.2% of GDP at the end of 2019.

At this session, the CNB Council also approved the proposal by the Addiko Bank d.d. to appoint Pierre Marie Geneviève Serge Boscq to the Management Board of that bank.