Due to the increasing financing of the state through the issuance of short-term treasury bills, which serve as collateral for loans from the HNB, the Council of the Croatian National Bank has decided to change the rules.
Namely, by amending the decisions on the use of intraday and lombard loans, the percentage of the nominal value of treasury bills that the central bank accepts as collateral for such loans has been reduced from 90 percent to 50 percent. The HNB’s explanation states that this is because the Ministry of Finance is obtaining an increasing portion of the missing funds precisely through the issuance of treasury bills, thereby increasing the collateral for banks. Based on this collateral, banks can practically automatically and at their own discretion use intraday and lombard loans. Limiting the ability to use available collateral facilitates the central bank’s management of liquidity through regular reverse repo auctions, thereby preserving exchange rate stability and controlling inflationary pressures, as stated by the HNB. (G.G.)
