In response to the gradual downward trend in interest rates on the money and credit markets, the Croatian National Bank Council at its session today decided to reduce the discount rate from 9% annually to 7%. Although this rate has no significant direct impact on domestic monetary developments, the reduction should have an additional effect on the decrease in interest rates in relations between legal persons and between legal and natural persons.

Pursuant to the Civil Obligations Act, the discount rate is used to calculate the statutory default interest rate, determined on a semi-annual basis, which serves as the initial value for determining the highest permitted contractual interest rate. Consequently, pursuant to today's Council decision and the provisions of the Civil Obligations Act, as from 1 July 2011 the statutory default interest rate will be 15% annually in business relations between legal persons and 12% annually in relations between legal and natural persons, whereas the highest contractual interest rate may amount to 22.5% in business transactions between legal persons and to 12% in transactions between legal and natural persons.

Also at today's session, the CNB Council examined the latest economic and monetary indicators and projection of future trends, a report on the banking system condition in the first quarter of this year and a report on the operation of the Croatian Mint in 2010.

The CNB Council approved the decision of the Supervisory Board of Veneto banka d.d., Zagreb, to appoint Michele Romano as Chairman and Leonardo Iannotta and Boris Kalajdžić as Members of the Bank's Management Board.

Slavonski zatvoreni investicijski fond d.d., Zagreb was given approval for the acquisition of a qualified holding in the initial capital of Slatinska banka d.d., Slatina.