Croatian Finance Minister Lalovac calms fears over currency fluctuations.
Finance minister Boris Lalovac said on Tuesday that people should not be afraid that the kuna could weaken against other currencies and that exchange rate fluctuations are possible, but will not last, reports Poslovni.hr on September 30, 2015. “Do not be afraid, there is no need to panic. The Croatian National Bank has the legal authority to defend the exchange rate and to provide liquidity to financial markets”, said Lalovac to reporters. “There are no excessive fluctuations of the exchange rate and the short-term fluctuations will soon calm down”, said the finance minister.
At the end of last week, exchange rate for euro stood at 7.6126 kuna, with euro gaining 0.3 percent week on week. On Monday, the exchange rate of kuna depreciated further 0.28 percent against the euro, but strengthened slightly on Tuesday.
Asked to comment on claims that the conversion of loans in Swiss francs into euros could lead to an increase in bank interest rates, he said that there is no need for that since EURIBOR is at its lowest historical levels. He also said that the banks have much larger problems than the conversion of loans, including the problem of a hundred Croatian citizens who have loans in the total amount of six billion kuna which they will never return. “I would not want for all the citizens to suffer for banks’ previous bad investments. I believe that the banking business will be stable, just like it has been so far”, he added.
Asked if the defence of the exchange rate could lead to a decrease of credit rating of the country and to more expensive borrowing in the future, Lalovac answered that there will be no disturbances either in the budget or in the payment of loans.
When we had a good rating, we were paying the interest between 6 and 7 percent, and now it is considerably lower”, said Lalovac. “Today, we are a part of the EU and we will comply with all the fiscal rules”, said the minister, adding that industrial production and personal consumption are growing, while the revenues from VAT have never been larger.
