At its session today, the CNB Council was briefed on current economic, monetary and financial developments in the euro area and Croatia. The members of the Council discussed the condition of the financial system and adopted several decisions within their competence.
Favourable economic developments continued to reduce the exposure of the Croatian financial system to systemic risks, which are still assessed as moderately elevated. Households’ financial position is supported by a dynamic labour market paired with strong income growth. Households are also benefiting from the very low pass-through of tightened financing conditions to the servicing costs of existing loans due to the widespread practice of interest rate fixation, as well as legal caps on interest rates. Very good business performance has made it easier for corporations to cope with rising financing costs. Against this background, banks’ materialised credit risk continued to decline, while high profitability and liquidity further strengthen their resilience. At the same time, very strong consumer lending and the growing burden of repayment of new housing loans increase potential risks in the event of a possible deterioration in the economic outlook. In addition, real estate prices remain on a steep upward trajectory, although the number of transactions continued to decrease.
At the end of June, the previously set higher countercyclical capital buffer rate started to apply, which is assessed as appropriate under the current circumstances. However, measures aimed at preserving financial stability and increasing the resilience of the banking system could be further tightened if cyclical vulnerabilities continue to increase, particularly bearing in mind strong consumer lending in a still relatively favourable macrofinancial environment.
The CNB Council adopted decisions on the issuance of gold and silver collector coins "Puratić Power Block", the gold collector coin and silver collector coins "Island of Susak" and gold and silver collector coins "Dražen Petrović".