Total liquid assets (M4) grew in June, reflecting the strong rise in net foreign assets of the CNB and, to a smaller extent, the growth in net domestic assets of the monetary system. In the structure of M4, money (M1) increased and quasi-money grew due to the rise in foreign currency deposits.

Total placements of monetary institutions to domestic sectors picked up in June, on the back of an increase in household loans, mostly driven by the new round of the government's housing loans subsidy programme, and a rise in placements to the central government. In contrast, placements to corporates and other financial institutions decreased.

Total liquid assets (M4^[1]) grew by HRK 5.0bn in June (1.3%, based on transactions) owing to the strong rise in net foreign assets (NFA) of the CNB and, to a smaller extent, the growth in net domestic assets (NDA) of the monetary system (Table 1). The growth in the NFA of the CNB was driven by the rise in bank funds in TARGET2 and the purchases of foreign exchange from banks and the government. The simultaneous growth in the NDA came mainly as a result of larger claims on the central government and households. As regards the components of M4, money (M1^[2]) went up by HRK 3.1bn or 1.8% from May, due mostly to the rise in corporate and household demand deposits. The quasi-money also increased, in large part due to the rise in foreign currency deposits of households (Table 3). On an annual level, the growth rate of M1 decelerated from 18.0% in May to 16.8% in June, due to the base effect of stronger increase in M1 in June 2020, while M4 picked up in the same period, from 8.1% to 8.7%, mostly fuelled by the strong growth in foreign currency deposits in June 2021 (based on transactions, Figure 1).

Figure 1 Monetary aggregates annual rates of change based on transactions	Figure 2 Placements annual rates of change based on transactions
Source: CNB.

Total placements of monetary institutions to domestic sectors (except the central government) grew by HRK 0.7bn or 0.3% (based on transactions) in June on the previous month, with the annual growth rate increasing from 3.4% in May to 3.8% in June (Figure 2). In total placements, which stood at HRK 240.5bn in June, loans accounted for the greatest share (HRK 234.8bn). Loans grew on the back of increased lending to households (HRK 1.2bn or 0.9%) and the still strong growth in housing loans (HRK 1.0bn or 1.5%), attributable to the impact of the new round of the government's subsidy programme. An upward trend was also observed in general-purpose cash loans (HRK 0.2bn or 0.4%). Moreover, the annual growth rate of household loans accelerated from 3.5% to 4.0%, with housing loans increasing from 9.7% to 10.1%, and general-purpose cash loans recorded the positive annual rate of change in June (0.2%), although decreasing on an annual basis for several months. In contrast, corporate placements declined by HRK 0.2bn or 0.3% from the previous month and so did the placements to other financial institutions (HRK 0.2bn or 2.3%, Table 2), causing the annual growth rate of corporate placements to slow down from 1.8% to 1.5%.

Table 1 Summary consolidated balance sheet of monetary institutions
in billion HRK and %

¹ The sum total of asset items 2.2 to 2.8 of Bulletin Table B1: Consolidated balance sheet of monetary financial institutions.
² The sum total of liability items 2 to 5 of Bulletin Table B1: Consolidated balance sheet of monetary financial institutions.
Source: CNB.

Table 2 Loans (except the central government) and main components
in billion HRK and %

¹ In addition to loans to households and corporates, they also include loans to the local government and other financial institutions.
² The transactions show changes that exclude the effects of exchange rate changes, securities price adjustments, reclassification and write-off of loans, including the sale of loans in the amount of their value adjustment.
Source: CNB.

Table 3 Deposits (except the central government) and main components
in billion HRK and %

¹ Includes only kuna sources of funds of credit institutions.
² The transactions show changes that exclude the effects of exchange rate changes, securities price adjustments, reclassification and write-off of loans, including the sale of loans in the amount of their value adjustment.
Source: CNB.

For detailed information on monetary statistics as at June 2021, see:

Central bank (CNB)
Other monetary financial institutions

1. Total liquid assets (M4) as defined by the CNB represent a broader definition of currency in circulation. ↑

2. Money (M1) as defined by the CNB represents a narrow definition of currency in circulation. ↑