## REPUBLIC OF CROATIA — REPRESENTATIVE RATE FOR THE EURO

## Source details

**Canonical URL:** [REPUBLIC OF CROATIA — REPRESENTATIVE RATE FOR THE EURO](https://www.imf.org/-/media/files/publications/cr/2023/english/1hrvea2023001.pdf)

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### EU Decision and Conversion Rate
- The Council of the European Union decided on July 12, 2022 that the Republic of Croatia had fulfilled the necessary conditions for adoption of the euro with effect from January 1, 2023.
- The conversion rate was set at 7.53450 Croatian kuna per one euro (EU Council Regulation (EU) No. 2022/1208 of July 12, 2022).
- The Croatian authorities notified the Fund on October 5, 2022 that the euro will be their country’s currency, effective from January 1, 2023.

### IMF Procedures for the Representative Exchange Rate for the Euro
- In December 1998, the Fund determined procedures for the representative exchange rate for the euro under Rule O-2(b)(i) of the Fund’s Rules and Regulations after consultation with the 11 members that adopted the euro on January 1, 1999.
- The procedures provide that:
  - the representative exchange rate for the euro under Rule O-2(b)(i) of the Fund’s Rules and Regulations is the rate against the U.S. dollar as published daily by the European Central Bank; and
  - the European Central Bank will promptly inform the Fund of any changes in the exchange arrangements, which may affect the determination of the representative exchange rate.

### Application to New Euro Adopters and Users of the Euro
- The same procedures were later applied to members who subsequently became members of the euro and to those members that are not members of the euro but use the euro as a legal means of payment.
- Examples cited in the source include:
  - Members that joined the euro area since January 1999: Greece, Republic of Slovenia, Cyprus and Malta, Slovak Republic, Republic of Estonia, Republic of Latvia, and Republic of Lithuania.
  - Non-euro-area users of the euro as legal means of payment: San Marino, Montenegro, Republic of Kosovo, and Principality of Andorra. The Principality of Andorra and San Marino have a monetary agreement with the EU.

### Proposal for Croatia
- After consultations with the Croatian authorities, it is proposed that the approach used to determine the representative exchange rate for the other euro area members be similarly extended to the Republic of Croatia.

*Prepared by the Finance Department in consultation with the European, Legal, and Monetary and Capital Markets Departments; completed November 15, 2022.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1hrvea2023001.pdf_