The Council of the Croatian National Bank examined recent monetary and economic developments, adopted the annual report on CNB's operations and financial results in 2002 and the report on the internal audit of the central bank and the Croatian Monetary Institute for that year. Acting in accordance with its authority, the Council also enacted a number of decisions.
Last year's CNB operations resulted in a low inflation rate (2.3 percent) and a broadly stable exchange rate. This was achieved within the context of a relatively high 5.2 percent GDP growth and an exceptionally high rise in bank placements totaling 30 percent, of which 42.8 percent went to household and 22.7 percent to corporate placements. In addition, the current account deficit reached a high 6.9 percent, while the external debt increased by 35 percent (in that, 24 percent was accounted for by the government, 73 by banks and 25 by enterprises).
International reserves make up more than 99 percent of total assets managed by the central bank. Total financial indicators were therefore strongly influenced by last year's cross-currency developments in the international market, primarily by the fall of the dollar which accounts for one third of these reserves, whose currency structure is adjusted to the structure of Croatia's external liabilities. Owing to these changes, the CNB incurred a foreign exchange loss amounting to around HRK 1.24bn. Last year however, the fall in the value of the dollar partly contributed to the USD 1.2bn increase in international reserves, which reached a total of USD 5.86bn, rising by 25 percent compared with the year before.
In the income statement this was shown as an unrealized loss of HRK 597m, which was covered from central bank general reserves, generally used for such purposes. No central bank's bad loans were debited to reserves in 2002. Total central bank's operating expenses, including depreciation, amounted to approximately HRK 215m in 2002. Of this amount, an approximate HRK 120m went to gross staff costs (net salaries, taxes, surtaxes, contributions from and on salaries, etc.).
The CNB Council gave its approval for appointing Izidor Sučić as chairman of the management board of Gospodarsko-kreditna banka d.d.