The Croatian National Bank (HNB) Council on Friday adopted a decision making it possible for banks to use their required reserves for a certain period of time and under special conditions, the HNB said.
Banks will have to explain to the central bank the reason for seeking those funds and the HNB will charge interest on the amount by which a bank's required reserves have been reduced.
The interest rate on using this source of liquidity for a period of up to three months will be the marginal lending rate increased by one percentage point. In case this source of liquidity is used for a longer period of time, the interest charged will be the marginal lending rate increased by two percentage points.
Considering the current trend of declining interest rates on the financial market, the HNB Council decided to lower the marginal lending rate from 9 percent to 6.25 percent.
