Central Bank Independence in Transition Economies

3C. Limitations on Lending 

The Government  keeps its deposits in the National Bank of Croatia (Art. 57). 

The NBC can grant short term credit to the government which have to be repaid by the 

end of the budgetary year. Total amount of the credit is limited to 5 percent of the 

budget in the current year (Art. 58). The interest rate charged on this credit is the NBC 

discount rate (not specified in the law on NBC). 

3D. Banking Supervision and Exchange Rate Policy. 

The Bank is responsible for supervising the operation of commercial banks (Art. 

4). The NBC conducts exchange rate policy (Art. 26-34).