The Croatian National Bank (HNB) ended 2018 with a loss of HRK 468.37 million, as against the HRK 2.55 billion loss recorded the year before, according to an annual report which shows that the loss, resulting mostly from exchange rate differences, was covered from the general reserves.

The Croatian National Bank (HNB) ended 2018 with a loss of HRK 468.37 million, as against the HRK 2.55 billion loss recorded the year before, according to an annual report which shows that the loss, resulting mostly from exchange rate differences, was covered from the general reserves.

The HNB’s international reserves at the end of 2018 totalled EUR 17.44 billion, up 11% on the year. Net international reserves increased by 15.2% to EUR 15.82 billion.

Last year the central bank purchased a record high EUR 1.8 billion in foreign exchange transactions, generating HRK 13.6 billion in liquidity.

The euro’s share in reserves at the end of 2018 was 85.1%, as against 83.2% a year before, while the US dollar’s share dropped to 12.7% from 14.5% at the end of 2017. The share of special drawing rights in international reserves dipped from 2.3% to 2.1%.

In line with the currency structure and the fact that international reserves make up almost all of the HNB’s assets, while the bulk of liabilities is denominated in the national currency, the HNB, like central banks in many other countries, is markedly exposed to the currency risk, and exchange rate differences directly impact profits, the report says.

Unrealized exchange rate differences were negative (HRK 592 million). Consequently, the HNB’s profit result in 2018 was HRK 468 million in the red. Said amount was covered from the HNB’s general reserves which totalled HRK 11.3 billion at the end of 2017.

The report says that 499 forged kuna bills were registered in 2018 totalling HRK 150,920. The number of registered forged kuna bills was up 97.2% on the year. Two forgeries were registered per million bills in circulation, as against 1.1 in 2017.