The government would prefer to spend foreign reserves – two-thirds of the budget – to secure another mandate. However, if foreign reserves fall, Croatia will fall as well. Under someone’s protectorate.
The first foreign exchange intervention by the Croatian National Bank (HNB) in the last 19 months, aimed at stopping the weakening of the kuna (116.4 million euros were sold to banks, injecting 860 million kuna into the market), has provoked a logical question: how long can HNB Governor Ċ½eljko Rohatinski defend the kuna with foreign reserves? What is the limit to which he is willing to spend to preserve the kuna, as well as the country’s credit rating?
