The Croatian National Bank (HNB) on Wednesday accepted all offers from banks amounting to 233 million kuna at a fixed repo rate of 0.50 percent, as announced by the HNB.
At the second reverse repo auction of this year, through which the central bank influences kuna liquidity in the financial market, offers from banks totaled 233 million kuna, meaning that the HNB accepted all submitted offers. The repurchase date is January 20, and today 223 million kuna is maturing, which the central bank placed with commercial banks at last week’s auction.
Through reverse repo auctions, the HNB lends kuna to banks for one week, with state debt securities as collateral, thereby influencing the kuna liquidity of banks and mitigating pressure on the rise of kuna interest rates in the money market.
After the financial market reacted to the implementation of the legal solution for the conversion of loans linked to the Swiss franc into euros by weakening the kuna against the euro and rising interest rates, the central bank announced at the end of September last year that it would use existing monetary policy instruments to maintain exchange rate stability and satisfactory kuna liquidity, and among other things, it began operations in the open market through repo auctions.
Among the measures taken by the central bank is the decision that from the next accounting period, specifically from the calculation of the mandatory reserve on January 13, 2016, the obligation to allocate the foreign currency part of the mandatory reserve will be abolished, allowing banks more flexible management of foreign currency liquidity.
The HNB also announced that it will start introducing longer-term reverse repo auctions at the beginning of the year.
