December 4, 2018 / 1:42 PM / 12 days ago

Croatian central bank to hold five-year repo auction next week

ZAGREB, Dec 4 (Reuters) - The Croatian central bank said on Tuesday it would hold a five-year repo auction next week at an unchanged fixed interest rate of 1.2 percent.

The auction will be held on Dec. 11. The maturity date for the loans will be Dec. 13, 2023.

It is the first such long-term operation by the central bank year. The previous one was held 13 months ago.

The central bank also used to hold occasional weekly repo auctions to boost short-term liquidity, but extra liquidity has not been needed this year.

The longer-term repo operations were devised to encourage lending in the national currency, the kuna. Most of Croatia’s deposits and loans are denominated in euros, creating a potential currency risk.

Recently the percentage of loans extended in the local currency has been rising.

Croatia aims to adopt the euro in six to seven years.

Reporting by Igor Ilic, editing by Larry King

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