Low inflation, stable exchange rate

Published: 11/9/2002

At its meeting held on Wednesday, September 11, 2002 the Council of the Croatian National Bank, chaired by the Governor Dr Željko Rohatinski, reviewed recent economic and monetary developments and the report on the international reserves management in the first half of the year, approved the establishment of a new savings bank and fifteen nominations for members and chairpersons of banks´ management boards.

According to the available macroeconomic indicators, prices and the exchange rate continue to be stable. In August, retail prices were 0.1 percent lower than in July and 1.2 percent higher than in the same month last year. Despite the recent rise in prices of certain utility services and energy products, it can be expected that the 2002 inflation will remain low. A key precondition for the realization of these expectations is further absence of considerable rises in oil prices on the world market.

This year no usual seasonal interventions of the central bank on the foreign exchange market, aimed at reducing excessive exchange rate fluctuations, proved necessary: there were no interventions in July and only one in August resulting in the purchase of EUR 47.2. In the first ten days of September the central bank did not intervene on the forex market.

As expected, bank deposits have grown gradually. The liquidity of the banking system is good. This is also indicated by low interest rates on the money market (in August interest rates on daily and over-night loans were slightly above 1 percent), as well as a high amount of purchased kuna denominated CNB bills (at the end of August the purchase of CNB bills by commercial banks amounted to HRK 5.3 billion with the average interest rate of 1.97 percent).

At the Wednesday meeting the Council approved the establishment of PBZ stambena štedionica d.d. Zagreb, while Unicredito Italiano SpA was given prior approval for the acquirement of 80.2 percent of shares in Cassa di Risparmio di Trieste - Banca d.d. Zagreb, which was so far indirectly owned by that banking group.

Furthermore, the CNB Council approved the following nominations proposed by the supervisory boards of the below stated financial institutions: Ms. Marica Orlović for member of the management board of Brodsko Posavska Banka d.d. Slavonski Brod, Mr. Mato Mišić for member of the management board of Credo banka d.d. Split, Ms. Branka Andrassy and Ms. Suzana Sučić for members of the management board of Gospodarsko-kreditna banka d.d. Zagreb, Mr. Ivo Bilić for member of the management board of HVB Bank Croatia d.d. Zagreb and Ms. Zdenka Batinić for chairwoman and Ms. Doroteja Juras for member of the management board of Hypobanka d.d. Zagreb. Also, the Council agreed with the appointment of Ms. Franka Barbić as member of the management board of Međimurska banka d.d. Čakovec, Mr. Mirko Brozović as chairman and Mr. Dražen Klarić as member of the management board of PBZ stambena štedionica d.d. Zagreb and Mr. Hans Christian Vallant as member of the management board of Raiffeisen stambena štedionica d.d. Zagreb. In addition. The CNB Council also approved the nominations of Dr Tomas Jerzy Taraba for chairman and Ms. Andrea Kovacs, M.A., for member of the management board of Volksbank d.d. Zagreb, Mr. Zdravko Anđel for chairman and Dr Herbert Weinzetl for member of the management board of Wüstenrot stambena štedionica d.d. Zagreb.