Croatian National Bank Loses 3% of Assets

Total Croatia News

ZAGREB, March 21, 2018 – After reaching a record nominal high of 127 billion kuna in December 2017, total assets of the Croatian National Bank (HNB) declined by 3.3% or 4.2 billion kuna to 123 billion kuna in January 2018, while increasing by 9.6% or 10.8 kuna billion in comparison with January 2017, Raiffeisenbank (RBA) says in a report.

The changes reflected a decline in foreign assets which account for 99% of total assets and represent a kuna equivalent of the central bank’s international reserves.

Foreign assets include time deposits with foreign banks, investments in securities, special drawing rights, currency and demand deposits with foreign banks, and the reserve position at the International Monetary Fund. The items “Currency and demand deposits with foreign banks” and “Time deposits with foreign banks” recorded considerable changes.

In the liabilities section of the HNB’s balance sheet, reserve money accounted for 72%, reaching 88.9 billion kuna, up 20% over January 2017. The largest increase of 24% was recorded in the item “Credit institutions’ deposits”.

Viewed in euro, foreign assets or gross international reserves reached a nominal record high of 16.2 billion euro. The currency structure of total reserves is predominated by investments in euro, followed by investments in US dollars and special drawing rights.

Compared with December 2017, total reserves grew by 522 million euro or 3.3% as a result of the strengthening of the kuna against the euro by 1.3%, while compared with January 2017, they rose by 1.6 billion euro or 11.2%.

RBA says that the continued increase in gross international reserves is primarily the result of foreign currency purchases from commercial banks and a higher level of repo transactions. The HNB intervened in the foreign exchange market in January 2018 buying 405.5 million euro from commercial banks. Net international reserves increased by 2.5% or 0.3 billion euro to 14.1 billion euro.

“The value of international reserves is sufficient to cover slightly more than eight months’ worth of goods and services and it fully covers the obligations towards foreign creditors which mature by the end of this year in the amount of 7.7 billion euro. The current amount of international reserves is sufficient for successfully implementing the monetary policy, maintaining the stability of the foreign exchange rate and financing any imbalances in the balance of payments,” RBA said.


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