Croatian central bank intervenes again to alleviate kuna’s appreciation

Croatian central bank intervenes again to alleviate kuna’s appreciation
By bne IntelliNews July 14, 2017

Croatia's central bank (HNB) purchased €101.5mn on the foreign exchange market on July 14 at an average kuna/euro rate of 7.4210 from local banks in order to alleviate the appreciation of the local currency, according to a statement from the HNB.

Croatia's better than expected macroeconomic performance, higher than expected tourism revenues and rising EU funds absorption have been supporting the local currency. Domestic financial markets are expected to continue to perform well.

The kuna lost 0.05% d/d to trade at 7.4090 against the euro as of 14:40 local time on July 14 following the central bank’s intervention.

This was the third FX intervention by the HNB in 2017. On June 6, the HNB intervened to purchase €188mn from the market at a price of 7.4163. On June 8, the HNB purchased €186mn at an average rate of 7.4266.

The central bank purchased a total of €869mn in five direct interventions into the domestic FX market in 2016.

The Croatian central bank continues to pursue an accommodative monetary policy and exchange rate stability, and to encourage kuna lending by providing long-term kuna liquidity, the International Monetary Fund (IMF) said in December.

Croatia has been a member of the EU since 2013, but is not yet a member of the euro or Schengen zones. The Croatian central bank keeps the kuna under a managed float against the euro.

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