ZAGREB, Oct 20 (Reuters) - Croatia’s central bank on Tuesday cut its lombard and discount rates to take pressure off local interest rates and the national kuna currency.
“The lombard rate has been reduced to 2.5 percent from 5.0 percent, while the discount rate has been reduced to 3.0 percent from 7.0 percent. This is made within our policy of securing enough liquidity in the banking system and for keeping the exchange rate stable,” the central bank said in a statement.
Local interest rates and the kuna currency have come under pressure recently following the enforced conversion of the country’s stock of Swiss franc loans into euros.
Croatia’s central bank mostly uses its exchange rate against the euro to control monetary policy and rarely makes decisions about interest rates. (Reporting by Igor Ilic; Editing by Hugh Lawson)