ZAGREB, April 15, 2020 – The Croatian National Bank (HNB) said on Wednesday it had agreed with the European Central Bank (HNB) to set up a precautionary currency agreement, known as a swap line, that will allow the HNB to borrow up to €2 billion from the ECB in exchange for Croatian kuna.
The HNB said in a press release that the precautionary currency swap line would be activated if needed.
“The currency swap line allows for the exchange of the kuna for the euro in the amount of EUR 2bn,” the national bank said.
This swap line gives the HNB “the space to provide additional euro liquidity to Croatian financial institutions, should they need it, without using its own international reserves.”
The Croatian central bank said that it “will notify the ECB of the use of euro liquidity acquired through the currency swap line. The currency swap line will remain in place until 31 December 2020, and can be extended if necessary.”
In March, the HNB conducted five interventions on the foreign exchange market to maintain the stability of the exchange rate of the kuna, selling a total of € 2.25 billion.
It has also taken some other measures to mitigate the economic impact of the coronavirus pandemic.
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