The Croatian Ministry of Finance on Tuesday sold 632 million kuna (€84 million) worth of one-year treasury bills at 0.2 percent interest rate.

With 380 million kuna worth of treasury bills reaching maturity soon, the Ministry offered 600 million kuna for subscription. Lenders submitted bids worth 667 million kuna and the ministry accepted 632 million kuna. The treasury bills were issued in the amount of 581 million kuna with one year’s maturity at an interest rate of only 0.2%, the same as at the last auction held in mid-August.

The same terms and conditions applied as in August, mainly as a result of a record high surplus of liquidity in the Croatian financial system, of nearly 85 billion kuna. The record surplus is the result of the decision by the central bank to set the reserve requirement rate for commercial banks at 5 percent from 10 August to 13 December 2022.

In July, the HNB Council decided to reduce the reserve requirement rate from 9 percent to 5 percent in August and from 5 percent to 1 percent in December, which is the reserve requirement rate in the euro zone. As a result, 34.2 billion kuna was released from the reserves of commercial lenders in Croatia.

The balance of subscribed treasury bills has now increased by 252 million kuna to 12.84 billion kuna. The next auction is set for 18 October.

(€1 = 7.53 kuna)