March 13, 2020 / 2:57 PM / 17 days ago

UPDATE 1-Croatia central bank to hold liquidity operation next week

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ZAGREB, March 13 (Reuters) - The Croatian central bank said on Friday it would hold a five-year structural liquidity operation next week as a response to the coronavirus crisis.

“With an intention to overcome this crisis situation caused by the coronavirus, the central bank will on March 16 hold a structural operation with an interest rate of 0.25%. The central bank has also started buying Croatian state bonds to stabilise the market situation,” the bank said in a statement.

The bank also said that Croatia’s growth this year would be considerably different from the earlier official projections. The government forecast this year’s growth of 2.5%, the central bank 2.8%.

“The real gross domestic product (GDP) will very likely considerably diverge from the earlier projections. The effect of the coronavirus crisis is difficult to assess at this moment,” the central bank said.

Italy, which is severely hit by the coronavirus pandemic, is one Croatia’s main trade partners, along with Germany.

This week the central bank intervened three times on the local currency exchange market to curb losses by the national currency, the kuna.

Reporting by Igor Ilic; Editing by

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