At its meeting held on Wednesday, January 16, 2002, the Council of the Croatian National Bank, chaired by the Governor, Dr Željko Rohatinski, reviewed recent economic and monetary developments and reached several decisions in accordance with its authority.
Looking at the price movements last year, the Council of the CNB concluded that they were mostly characterized by low growth rates. Price movements in December provide further confirmation for such an evaluation; the average level of retail prices declined by 0.2% in December, compared with the previous month, thus causing the year-on-year retail price growth rate to fall from 2.8% in November to 2.6% in December. This represents a fall of 4.8 percentage points in year-on-year retail price inflation rate, compared with December 2000. Retail prices used in the calculation of core inflation also declined by 0.2% on average in December, compared with November, resulting in a further fall in the year-on-year core inflation rate from 2.0% in November to only 1.7% in December. Compared with December 2000, the core inflation rate decreased by 2.9 percentage points. The fall in oil and raw materials prices on the international markets, increased competition on the domestic market, moderate wage growth and the decision of the fiscal authorities not to increase excise duties on beverages and tobacco were all factors which helped ease the inflationary pressures in 2001.
Monetary developments in the last quarter of 2001 were characterized by a rapid growth in household foreign exchange deposits. This large inflow of funds into the banking system encouraged commercial bank credit activities. In November 2001, bank placements to other sectors increased by 1.6% and at the end of the month stood at HRK 74.0bn. November was also the second consecutive month in which corporate lending grew faster than household lending, which was reflected in intense investment activity and production growth. Such developments are expected to stimulate further growth in exports.
The Council of the CNB also reviewed the independent auditor's report on the audit of the financial statements of the CNB. The audit of the CNB balance sheet as of December 31, 2000, of income statement and of changes in equity for the year then ended was performed by PricewaterhouseCoopers. The audit was conducted in accordance with International Standards on Auditing as promulgated by the International Federation of Accountants. In the opinion of the auditors, the audited financial statements of the Croatian National Bank present fairly, in all material respects and in accordance with International Accounting Standards, the financial position of the CNB as of December 31, 2000.
Raiffeisen International Beteiligungs AG, Austria was given a prior approval of the Council of the CNB to acquire 70% of voting shares in Raiffeisenbank Austria d.d. Zagreb and Trajektna luka d.d. Split was given an approval to acquire the additional 2% voting shares in Imex banka d.d. Split, thus increasing its share in this bank's equity capital to 21.09 percent.