Introduction - FiFo Ost

Introduction
Economic summary
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Exchange rate
Annual average, kuna per US$
0
’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01
est. proj.
Source: Ministry of Finance of the
Republic of Croatia, January 2001
6 Croatia Investment Profile
Exchange rate
Since the introduction of a new currency (the kuna, HRK) in 1994, the monetary policy targeted
exchange rate stability through a managed float regime. The objective of exchange rate stability has
become more attainable with the steady accumulation of international reserves, which stood at
more than 250 per cent of the monetary base at the end of 2000.
IMF Stand-by Agreement
As the cornerstone of its commitment to promoting employment and raising the population's
standard of living while maintaining macroeconomic stability, the Croatian government and the IMF
reached a preliminary agreement on the signing of a Stand-by arrangement for SDR 200 million,
which confirms the merits of the government’s economic policies. The Stand-by Agreement will be
precautionary and the government does not plan to access the available funds. Croatia hopes to
raise financing for its 2001 budget under more favourable terms from private investors. The
agreement was made possible by the passing of a budget with a smaller fiscal deficit than in the
previous year and by reducing the overall wage bill in the administration and state-owned companies
by 10 per cent. The IMF also called for the long-term reform of the pension and health funds and for
measures targeting restructuring and privatisation in the enterprise sector.
Credit ratings
Standard & Poor's sovereign ratings, February 2001
Local Currency Foreign currency
Long-term Outlook Short-term Long-term Outlook Short-term
BBB+ Stable A-2 BBB- Stable A-3
Moody's country ceilings for foreign currency ratings, January 2001
Bonds and notes Bank deposits
Long-term Short-term Long-term Short-term
Baa3 P-3 Ba1 NP
Fitch IBCA foreign currency sovereign ratings, January 2001
Long term Short term
BB+ B