March 9, 2020 / 4:08 PM / 19 days ago

UPDATE 1-Croatia cenbank steps in to counter easing pressures on kuna

(Adds details, background)

ZAGREB, March 9 (Reuters) - The Croatian central bank said on Monday it had sold 387 million euros ($442 million) to commercial banks in an auction to counter easing pressures on the national kuna currency.

It said it had sold the euros at an average rate of 7.5127 kuna to the euro. The intervention came after the kuna slipped from the levels of around 7.51 to 7.56 per one euro.

Market participants said the depreciation pressures were due to an increased demand for euros amid dividend payments and recent refinancing of the state debt, part of which was denominated in euros.

It was the central bank’s first intervention on the local foreign exchange market this year. Its last intervention took place in August last year when it bought 332 million euros from the banks to stop appreciation pressures.

This has also been the first central bank’s intervention to stop depreciation pressures on the kuna since September 2015 as in the last almost five years the firming pressures prevailed.

The central bank keeps the kuna in a managed float regime and it fluctuates at between 7.3 and 7.7 kuna to the euro. The central bank oppose sudden stronger rate movements.

Croatia wants to adopt the euro in 2023 or 2024. ($1 = 0.8754 euros) (Reporting by Igor Ilic; Editing by Toby Chopra)

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