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UPDATE 1-Bids fall at Croatian central bank 4-year repo auction
May 24, 2016 / 9:41 AM / 2 years ago

UPDATE 1-Bids fall at Croatian central bank 4-year repo auction

(Adds analyst comment, para 3)
    ZAGREB, May 24 (Reuters) - Croatia's central bank said on
Tuesday bids in its second four-year repo auction of the year
had fallen to 146.5 million kuna ($22 million) and it had set a
fixed rate of 1.8 percent.
    The goal of the four-year auctions is to increase
longer-term kuna borrowing. At its first auction, on Feb. 23,
the central bank accepted all bids worth 565 million kuna.
    "Banks have sufficient kuna liquidity to service clients'
demand so that they do not need much additional funding. Also,
companies and citizens are still mostly deleveraging rather than
taking new loans," Raiffeisenbank' Zrinka Zivkovic Matijevic
said following the latest auction.
    Around 80 percent of deposits and loans in the newest
European Union member are denominated in euros and the central
bank wants to cut currency risk among local borrowers. 
    The central bank plans to hold four such repo operations
this year. It also holds weekly reverse repo auctions as a
standing facility, although demand in recent months has been
moderate due to good short-term liquidity in the banking system.
    The central bank said it could provide around 3.0 billion to
4.0 billion kuna to the banks through its four-year repo
operations this year.
($1 = 6.6995 kuna)

 (Reporting by Igor Ilic; Editing by Alexander Smith)

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