The International Monetary Fund (IMF) has accepted the Croatian National Bank's (CNB) arguments that it must continue to target exchange rate stability – and that it can do so effectively with smaller foreign exchange reserves than would normally be considered sufficient.

In the staff report on Croatia's Article IV consultation this year, published yesterday, the IMF said the CNB had "argued forcefully" that a quasi-peg between the kuna and the euro needs to be maintained, "as the contractionary