HNB: Sufficient euro coins and banknotes have been secured for our market needs

We have received our last salaries in kunas and we are dangerously close to entering the eurozone. Just over two weeks separate us from the moment when the euro will permanently replace the kuna, and since changing the national currency is not a simple process for citizens, entrepreneurs, or banks, the question arises – are we ready for this change?

Namely, some entrepreneurs, who will receive kunas and return euros in the first 14 days of 2023, complain that they cannot obtain cash in the new currency through regular means, and as we wrote last week, there is reportedly no money in banks when it comes to small denominations that should be returned to clients who pay in both the new currency and kunas.

But is that really the case? The Croatian Banking Association explained to us that, following the decision of the European Union Council to adopt the euro in Croatia, banks began to communicate intensively with business entities to inform them about all preparatory activities for the introduction of the euro.

– After conducting analyses and questionnaires in cooperation with business clients, banks have secured a sufficient amount of cash. Four months before the date of the euro introduction, the HNB began supplying business banks with euro banknotes, and three months before the introduction of the euro with euro coins – they say from HUB.

From Erste Bank, they told us that they have completed all necessary preparations for the introduction of the euro and that they have secured a sufficient amount of cash. They also emphasized that on December 1, they began distributing initial packages of euro coins for citizens and legal entities, and of the total number of ordered initial packages of euro coins, citizens have so far purchased about 25 percent of the packages, and accordingly, they do not expect a shortage of coins during the pre-supply process.

– However, generally speaking, in cases of potential increased demand from citizens on a daily basis, there may be temporary and short-term shortages of coins at certain locations until a new shipment of euro coins is delivered to a specific location, most often the next day. In addition, considering the fact that all business entities must be supplied by the end of 2022, and from January 1, 2023, start using euros in their operations, the general advice is that they should respond to the pre-supply call as soon as possible and be ready for the introduction of the euro with the necessary amount of euro cash in their cash registers and the denomination structure they need – they state from Erste Bank.

Pre-supply of euros

The Croatian National Bank emphasizes that the pre-supply of banks with cash euros began on October 1 and will last until December 31, or until the end of the year. Also, banks began indirect pre-supply of business entities at the beginning of November, and the supply of initial packages of euro coins for business entities started on December 1, while simplified indirect pre-supply begins five days before the date of the euro introduction, i.e., on December 27.

And when it comes to small and micro entrepreneurs struggling to obtain euros, the HNB states that small business entities have the most opportunities to acquire the necessary amount of euro coins during the pre-supply period.

– The simplest form of indirect pre-supply is the procurement of initial packages of euro coins for business entities. One initial package of euro coins for business entities contains a total of 525 euro coins of all denominations worth 145.50 euros – they explained from the HNB.

HUB further explains that micro business entities can be indirectly pre-supplied in three possible ways: by supplying initial packages of euro coins, according to the rules of simplified indirect pre-supply, as well as according to the rules of indirect pre-supply when larger amounts or earlier deadlines for obtaining cash euros are needed than allowed under simplified indirect pre-supply. In simplified indirect pre-supply, they state, banks will supply cash euros exclusively to micro business entities in amounts not exceeding 10,000 euros at the earliest five days before the introduction of the euro based on a signed statement. In indirect pre-supply, most banks have started supplying cash to business clients who are not micro business entities based on concluded contracts.

– Most business entities have contracts with business banks with a reserved cash pickup time, while micro business entities will be supplied with cash at the end of December. Accordingly, we do not expect operational difficulties in the period after the introduction of the euro that would arise due to insufficient supply of cash euros – they believe in HUB.

Sufficient coins secured

Additionally, the HNB states that of the total contracted approximately 175,863 initial packages of euro coins for business entities, the Croatian National Bank has distributed a total of 125,250 pieces or 71 percent of the contracted quantities in its eight cash centers, and banks have sold a total of 8,624 initial packages of euro coins for business entities as of December 7.

The HNB also conveys that they have secured quantities of euro coins and euro banknotes sufficient to meet the needs of our market and that the introduction of the euro is a monetary reform in which the production and procurement of euro coins and euro banknotes is just one of the many components of this demanding reform.