March 16, 2020 / 1:02 PM / 25 days ago

UPDATE 1-Croatia central bank acts for fourth time in week to support kuna

(Adds details, background)

ZAGREB, March 16 (Reuters) - Croatia’s central bank said on Monday it had sold 411 million euros ($460 million) to commercial banks to ease pressure on the kuna currency, in its fourth such auction in a week.

Increased demand for euros in the last 10 days has been driven by concerns about a likely reduced inflow of euros in the coming weeks or months due to the coronavirus pandemic.

The Croatian central bank said it had sold the euros at an average rate of 7.5763 kuna. The kuna was quoted at 7.5750 to the euro after the intervention from around a 7.60 level in early trade.

Since March 9 the central bank has sold 1.625 billion euros to the banks. Croatia’s currency reserves amounted to 19.07 billion euros at the end of January. Some two weeks ago the kuna was quoted at around 7.45 to the euro.

Croatia has so far reported 56 cases of the coronavirus infection, with three people having recovered and no deaths.

Croatia relies heavily on hard currency tourism receipts as the sector accounts for almost 20% of its economy.

The central bank keeps the kuna in a managed float regime and usually it fluctuates at between 7.3 and 7.7 kuna to the euro. Croatia is looking at adopting the euro in 2023 or 2024. ($1 = 0.8934 euros) (Reporting by Igor Ilic; Editing by Alexander Smith)

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