Central Bank Independence in Transition Economies

6C. Limitations on Lending 

The Bank can grant credit to the central budget. The increase in the stock of 

credit must not exceed 3 percent of the planned receipts of the central budget on none 

of the days of the year

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. Interest rate on this credit should be guided by the NBH basic 

interest rate (Art. 19-1, 19-3, 19-4). The above ceiling applies to the purchases of the 

Government's securities on the primary and secondary market (Art. 22-1). Current 

amendment to the NBH law prohibits the Bank from purchasing Government 

securities at the primary market. Under the new law the Bank cannot grant direct credit 

to the central budget except liquidity loans with a limit of 2% of the planned budget 

revenue.