At its Wednesday meeting chaired by the Governor, Dr Željko Rohatinski, the CNB Council discussed recent economic and monetary developments, the report on international reserves management in the first half of 2005 and the report on the banking system condition in the second quarter of the year. The Council also enacted several decisions falling within its field of competence.

The economic activity indicators point to more dynamic growth over the last few months. Industrial production increased, particularly in manufacturing, and real retail trade turnover also went up. The number of tourist arrivals and overnight stays climbed significantly during the first seven months compared with last year and construction activity gradually recovered.

Retail prices rose somewhat faster than expected, by 3.1 percent in the first seven months compared with the same period in 2004. As the kuna exchange rate remained stable, no central bank intervention on the foreign exchange market was required during the three summer months. Strengthened seasonal demand for the kuna was exclusively satisfied through open market operations.

Also at today's meeting, a new Decision on Payments and Collections in Foreign Means of Payment in the Country was enacted, which is in closer harmony with the EU regulations and practices than the previous decision and provides some more accurate provisions in order to avoid the possible differences in their legal interpretation for implementation purposes.

The CNB Council endorsed the proposals of the supervisory boards of two banks for new management appointments: the appointment of Ružica Adamović as member of the management board of the Croatian Bank for Reconstruction and Development, Zagreb, and of Zoran Košćak as member of the management board of Raiffeisenbank Austria d.d., Zagreb.