The CEO of Zagrebačka banka, Franjo Luković, announced an inevitable increase in interest rates in an interview with Novi list and made a series of sharp assessments regarding monetary and state policy. Unexpectedly, however, Luković’s question about whether the price paid to maintain the exchange rate of the kuna is appropriate was raised. This is the most open call from a banker to the central bank to ease restrictions and weaken the kuna so far.
It is not the same to defend the exchange rate in conditions where there is a greater supply of foreign currency than demand, što was the case until mid-last year when it was easier, and today, when the question is whether it is defendable or indefensible, said Luković, adding that a change in the exchange rate of up to ten percent would not be overly concerning for banks. The governor of the central bank, Željko Rohatinski, reacted sharply to this statement, saying that he cannot understand why a business banker would go public with such statements and create a psychology that could cause withdrawals of deposits from their own bank and the entire banking system. This is not professional behavior, especially if it comes from the CEO of the strongest bank in Croatia, Rohatinski said in an interview with Večernji list, adding that regardless of all domestic and foreign activities, Luković’s thesis that the stability of the exchange rate is indefensible does not hold.
