"That will bring into the banking system additional liquidity worth some 8.4 billion kuna ($1.48 billion/1.18 billion euro)," it said in a statement.
This move aims to improve the liquidity of the local commercial banks in the context of the global financial crisis and facilitate the state's financing on the domestic market, it added.
It is also a step toward the alignment of Croatia’s monetary policy to the standards of the European Union, it added.
Croatia started accession talks with the European Union in 2005 and hopes to join the bloc around 2011.
(1 euro = 7.1135 Croatian kuna)