CRB Eyes Liquidity Boost To Ease Fiscal Pressures

Indications by the Croatian National Bank that it may reduce banks' reserve requirements in a bid to encourage lending to the government further supports our view that the July amendments to the fiscal budget will fall short of the mark. Moreover, given that the recession continues to deepen with tax collection concomitantly tumbling, combined with the government's reluctance to seek IMF financing, the onus on the banking sector to plug the financing gap will increase going forward

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