At its session today, the Croatian National Bank Council reviewed the quarterly report on monetary and economic developments and the condition of the banking system, adopted the CNB's financial plan for 2008 and enacted a number of decisions falling within its field of competence.
The most important is the decision on increasing the CNB's discount rate from 4.5 percent annually to 9 percent. The discount rate has so far been of minor importance as a monetary policy instrument. However, pursuant to the provisions of the Civil Obligations Act, to be applied as of the start of the following year, the default interest rate and the maximum permitted contractual interest rate must be set for each half of the year using the discount rate valid on the last day of the previous half of the year. Acting in compliance with this regulation and paying heed to current financial market relations, the CNB Council accepted this change, based on which the discount rate for the first half of 2008 is to equal the Lombard rate.
Accordingly, pursuant to legal provisions on the calculation method, which in the Council's view are not completely adequate for practical application, in the first half of 2008 both the default and the maximum permitted contractual interest rate will amount to 14 percent in relations between natural and legal persons, while in transactions between legal persons and in their relations with public law persons the default interest rate will be 17 percent and the maximum permitted contractual interest rate 25.5 percent.
The amendments to the Decision Governing the Conditions for and the Manner of Performing External Payment Operations and the Decision on the Manner and Conditions under which Residents May Execute or Receive Payments Arising from Transactions with Non-Residents in Domestic Cash, Foreign Cash and Checks represent a step forward in liberalising external payment operations, whereas the provisions of the Decision on Medals and Tokens Similar to Euro Coins aim for minimising the possibility of any misuse or confusion.
Also at this session, Raiffeisen Bausparkasse G.m.b.H, Vienna, received approval for acquiring an over 75 percent share in the share capital of Raiffeisen stambena štedionica d.d. Zagreb. The CNB Council also endorsed the proposal of the Supervisory Board of Banka splitsko-dalmatinska d.d., Split to appoint Ante Blažević as Chairman of the Management Board and the proposal of the Supervisory Board of Hypo Alpe-Adria-Bank d.d., Zagreb to appoint Markus Ferstl as Chairman of the Management Board.