Growing Concerns For Economic And Banking Sector Outlook

Interbank lending rates in Croatia have continued to head higher in recent weeks on the back of the announcement by the Croatian National Bank (HNB) that it was raising its reserve requirement ratio for banks to 14.0% from 13.0%, effective October 12. While a good deal of the spike in the overnight Zagreb Interbank Offering Rate (ZIBOR), which saw rates rise by more than 300 basis points (bps) to 3.43% on October 13, was likely driven by higher demand for short-term borrowing to meet newly imposed reserve requirements amid tighter supply, we also believe that the steady rise in longer-dated ZIBOR speaks to growing concerns for the outlook in the wider economy and the banking sector.

To read the full article, please choose one of the following options: