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UPDATE 1-Croatia central bank buys 188 million euros from banks to tame kuna gains
June 6, 2017 / 10:21 AM / in 6 months

UPDATE 1-Croatia central bank buys 188 million euros from banks to tame kuna gains

 (Adds dealer's comment, details)
    ZAGREB, June 6 (Reuters) - Croatia's central bank said on
Tuesday it had bought 188 million euros ($211 million) from
commercial banks, intervening to ease firming pressures on the
kuna currency.
    It bought the euros in an auction at an average rate of
7.4163 kuna per euro.
    The kuna           was quoted at 7.4110 at 0950 GMT, down
from 7.3810 before the intervention.
    It is the first time the central bank has stepped in on the
local foreign exchange market this year. Last time, at the end
of December, it bought 438.3 million euros from the banks to
counter appreciation pressures on the kuna.
    Dealers said that this time the intervention was promted by
a rather strong inflow of euros in the banks in recent days.
    "Apparently, the kuna is following its usual firming trend
at the beginning of the summer tourist season amid an increased
inflow of euros," a dealer at a major local bank said.
    Also, firming pressures are attributed to an expected loan
worth several hundred million euros that Croatia's indebted food
concern Agrokor is negotiating with creditors as well as to
investors taking positions for a possible sovereign domestic
issue that the finance ministry is considering for next month.
    The central bank keeps the kuna in a managed float regime
against the euro occasionally intervening to counter firming or
easing pressures or sudden strong rate movements.
    ($1 = 0.8892 euros)

 (Reporting by Igor Ilic; Editing by Jeremy Gaunt)

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