July 14, 2017 / 10:24 AM / a year ago

UPDATE 1-Croatia cenbank buys euros to tame firming pressures on kuna currency

 (Adds details, quote)
    ZAGREB, July 14 (Reuters) - Croatia's central bank said on
Friday it had bought 101.5 million euros ($115.86 million) from
commercial banks in an effort to stem appreciation pressures on
the national kuna currency.
    It said it had bought the euros at an average rate of 7.4209
kuna per euro.
    The kuna eased slightly after the intervention and was
quoted at 7.4120 per euro at 1005 GMT, down from around 7.40 per
euro where it was hovering before the central bank had stepped
    "We have not witnessed excessively strong firming pressures
at the moment, but apparently the central bank is cautious and
wants to send a message at what level it wishes to see the kuna
at this point," a dealer at a major local bank said.
    A usually strong inflow of euros during the summer tourist
season is now additionally increased by a liquidity loan worth
480 million euros recently struck by Agrokor, a highly indebted
Croatian food group currently undergoing a restructuring
    "I think the euros coming to the market because of Agrokor
loan are a key factor now why the central bank wants primarily
to act preemptively," the dealer said.
    This is the third central bank's intervention to buy euros
since the beginning of June. In the first two interventions the
central bank bought altogether 374 million euros.
    The central bank keeps the kuna in a managed float regime
against the euro, occasionally intervening to counter firming or
easing pressures or sudden stronger rate movements. In the last
few years the kuna has been mostly floating at between 7.35 and
7.70 kuna per euro.

    ($1 = 0.8760 euros)

 (Reporting by Igor Ilic; Editing by)
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