Croatian C-Bank Rejects All Bids Worth 100.8 Mln Euro in Currency Auction

"As the offered price was above the exchange rate of the interbank transactions on the currency market, the Croatian central bank did not accept the bids", the bank said in a statement.

The proposed average rate of exchange in the auction was 7.214414 kuna per euro.

Before the intervention, the exchange rate was 7.185 kuna per euro and after the intervention it was 7.165 kuna per euro, the head of the FX department of Raiffeisenbank Austria Zagreb, Marko Germin, told SeeNews.

As the regular reverse repo auction did not take place on Wednesday, the Croatian central bank decided to offer the commercial banks an opportunity to raise their kuna liquidity through the sale of foreign currency, the bank said.

Liquidity is a bit of a problem right now, there is not enough kuna on the market, Germin said.

This is the fourth currency auction held by the central bank so far this year and the second one this week.

On Monday the Croatian central bank sold 270.6 million euro to commercial banks in a currency auction, aiming to ease pressure on the kuna currency. On October 14, the bank rejected all bids worth 93.2 million euro in a currency auction.

($ = 0.7838 euro)