Guverner Žugić at the Regional Meeting of Governors in Croatia

06/04/2023

The CBCG Governor Radoje Žugić is participating in the annual meeting of regional governors in Croatia.

The main topic of this year’s meeting is the current challenges of the monetary policy creators in the region in light of the current macroeconomic situation and the global environment.

With the governors of the central banks of Croatia, Slovenia, Bosnia and Herzegovina and North Macedonia, Governor Žugić participated in a round table held at the Faculty of Economics in Rijeka. The leaders of the monetary authorities of the region had the opportunity to discuss with students, representatives of the academia and Croatian businessmen the monetary policy challenges in small open economies, especially considering high inflation.

Saša Drezgić, Dean of the Faculty of Economics and Vedran Šošić, Chief Economist of the Croatian National Bank, gave introductory speeches. Then, based on their countries’ experiences, the governors discussed the monetary policy in conditions of rising inflation and the room for manoeuvre that small open economies’ central banks have during global inflationary shocks. They also discussed the European Central Bank monetary policy’s impact and the rising interest rates’ transfer to the interest rates of countries outside the euro area.

“Due to the issuing function absence, the CBCG does not strongly influence the price stability. Nevertheless, through the reserve requirements policy and macroprudential measures, we can influence the banks’ lending potential, i.e. the credit activity timeline during a specific period, and thus indirectly also the demand, i.e. prices”, Žugić pointed out during the discussion.

The annual meeting of regional central bank governors, which brings together Governors, representatives of banks and the financial sector, aims to improve cooperation, exchange experiences and discuss current challenges related to crucial financial stability areas.