Intervention by the Croatian National Bank may once again be necessary.
The Croatian National Bank (HNB) may have to again intervene in the foreign exchange market next month or in December in order to help the banks buy euros for the conversion of loans in Swiss francs into the euro, said on Thursday the governor of the Croatian National Bank Boris Vujčić, reports Poslovni.hr on October 15, 2015.
“For operation to go according to plan, it may be necessary to make another intervention in the foreign exchange market between mid-November and mid-December”, said the governor in Warsaw, where he is attending the conference on strengthening the competitiveness of Central, Eastern and Southeastern Europe.
The conference is organized by the Polish and Austrian central banks, and the governor will participate in Friday’s panel on the contribution of the countries in the region to the growth of the eurozone economy and Europe as a whole.
Last month, Croatia adopted a law on conversion of loans in Swiss francs into euros, with the goal of helping people who have taken such loans and who have been affected by the sharp rise of the franc against the euro.
HNS has sold the banks 268.3 million euros last month to support the kuna, which has come under pressure since the banks need euros in order to adjust their capital positions in foreign currencies, given the obligation to convert the loans into euros.
Banks have until mid-November to convert the principals of loans in francs into euros and to submit to debtors new plans for the repayment of their loans. Some of the banks have announced that they will file a complaint to the Constitutional Court since they believe that the forced conversion is unconstitutional.