Friday, November 25, 2011

Croatian National Bank Cuts Lombard Rate 275bps to 6.25%

The Croatian National Bank decreased its Lombard lending rate by 275 basis points to 6.25% from 9.00% previously.  Meanwhile the bank held its other interest rates unchanged.  The Bank said: "In addition, the central bank is allowing commercial banks to use their reserve funds under certain conditions,"... "The central bank has to approve the usage of reserves and will charge an interest rate of the Lombard rate plus 1 percent for periods up to 3 months, and Lombard plus 2 percent for longer periods." according to Bloomberg

The Croatian National Bank's latest moves include lifting its required reserve ratio by 100 basis points to 14.00% in September, and reducing the discount rate by 200 basis points to 7.00% in June this year.  The Bank last raised the discount rate by 450 basis points to 9.00% from 4.50% in December 2007.  According to IMF data, Croatia saw economic growth of 0.13% in 2010, while annual consumer price inflation was 2.6% for the year.


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