Exchange Rate: Kuna’s Current Position Favourable for Loans Tied to Euro

Lauren Simmonds

The currently strong kuna favors all those who have euro-denominated loans owing to the reduction in repayment rates.

As Poslovni Dnevnik writes on the 5th of February, 2018, the Croatian national currency is usually stronger during the summer due to the large inflow of euros brought in by foreign tourists, while during the winter months, the kuna has been regularly weakened, HRT states.

In January 2015, the kuna’s exchange rate was around 7.7 kuna against the euro, one year later, it was 7 kuna and 60 lipa, last year was 7 kuna and 50 lipa, and this year, 7 kuna and 40 lipa to the euro, which means that the kuna has managed to strengthen to its summertime heights.

This is happening despite the strong interventions of the Croatian National Bank (HNB/CNB) to prevent the strengthening of the currency. The Croatian kuna has gained strength owing to export growth and the record tourist season we’ve just experienced. For some this is more than satisfactory, for others, it’s quite another story.

That being said, a strong kuna benefits all those who have euro-denominated loans, as the rise reduces their repayments, it also reduces the price of various imported goods. On the other hand, export products become more expensive and exporters are less competitive, reports HRT.


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