CHRONICLE OF MONETARY POLICY OF 1997
MAY AND JUNE

7 MAY

Decrees of the President of Eesti Pank
On Changing the Limits on Meeting the Reserve Requirement

Proceeding from the Decision of the Board of Eesti Pank from 7 May 1996, On the Credit Institutions' Reserve Requirement, and the Decision from 15 April 1997, On Changing the Capital Adequacy Ratio, as well as the decrees of the President of Eesti Pank from 12 June 1996, On the Procedure for Calculating and Meeting the Reserve Requirement, and On the Establishment of Limits for Meeting the Reserve Requirement, the decree established that from 1 July 1997, EEK cash up to 30% of the total reserve requirement is to be calculated as a part of credit institutions' reserve requirement.

From the same day, Clause 1 of the Decree of the President of Eesti Pank from 12 June 1996, On the Establishment of Limits for Meeting the Reserve Requirement, which allowed cash to account for 40% of the reserve requirement, was revoked.

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On Partial Changes in the Decree of the President of Eesti Pank from 12 June 1996, On the Procedure for Calculating and Meeting the Reserve Requirement

Pursuant to Article 52 of the Law on Credit Institutions, and the decisions of the Board of Eesti Pank from 7 May 1996 and 15 April 1997, the wording of Clause 1.1 in Appendix 1 to the Decree from 12 June 1996, was changed as follows:

To calculate the total reserve requirement basis in accordance with Clause 2 of the Board of Eesti Pank Decision No 5-2 of 7 May 1996. The amounts payable to non-resident credit institutions exceeding the claims on non-resident credit institutions are to be calculated among the total reserve requirement basis. Amounts payable to resident credit institutions are not to be calculated among the total reserve requirement basis.

The old reporting form on the reserve requirement, as well as the instructions on filling in the form were invalidated and a new reporting form was introduced. Also, the format of electronic reporting on the reserve requirement was specified.
The decree took effect on 1 July 1997.

23 MAY

Decree of the President of Eesti Pank
On Supplementing the Rules for Fixing the Daily Exchange Rates of the Estonian Kroon

Due to the need to unify the Eesti Pank foreign currency exchange rates used by the commercial banks in accounting and reporting, the list of the currencies against which the daily exchange rate of the Estonian kroon is to be fixed (see Eesti Pank Bulletin, No 2 (29), 1997, pp 4-5) provided by the Decree of the President of Eesti Pank from 30 January 1997, was supplemented with the Hong Kong dollar (HKD) and the Singapore dollar (SGD).

Thus, the total number of currencies against which the daily exchange rate of the Estonian kroon is fixed, increased to 35.

29 MAY

A seminar of the central banks of the Baltic countries began in Pärnu. It was attended by employees of Eesti Pank (Bank of Estonia), the Bank of Latvia and the Bank of Lithuania, and representatives from the central banks of Czech Republic, Finland, Poland and Sweden, the International Monetary Fund, the Bank for International Settlements, the European Commission, the European Monetary Institute and Dresdner Bank AG.

The problems of monetary policy, financial intermediation and banking organization and management were discussed in three working groups. At the panel discussion on 30 May, speeches were made by the President of Eesti Pank Vahur Kraft, Head of Unit for Europe Agreement Countries of the European Commission Andries Brandsma and Head of Macroanalysis Department of Dresdner Bank Dr Rolf Schneider.

The material presented at the seminar will be published in a separate booklet.

30 MAY

Decree of the President of Eesti Pank
On Changes in the Decree of the President of Eesti Pank from 26 March 1997 'On the Security of Domestic Electronic Payments between Credit Institutions'

The decree extended the transition period established to the new regulations up to 29 June 1997, and ordered that the documents introduced by the 26 March decree will take effect from 30 June 1997.

12 JUNE

The museum of Eesti Pank was opened. A 50-kroon postal stamp depicting the Estonian kroon and bearing security elements was issued to mark the 5th anniversary of the reintroduction of the Estonian kroon.

16 JUNE

The book Estonian Monetary Reform 1992. From the Proposal of the Four to National Currency (in Estonian) was presented to the public.

18 JUNE

An academic conference dedicated to the 5th anniversary of the Estonian kroon took place in Tallinn, focussing on European integration. The speakers at the conference were the President of the Republic of Estonia Lennart Meri, Prime Minister Mart Siimann, President of Eesti Pank Vahur Kraft, Deputy Director of the International Monetary Fund Stanley Fischer and General Director of the European Monetary Institute Robert Raymond.

The conference's panel discussion was attended by the President of Bank of Finland Sirkka Hämäläinen, Member of the Board of the Deutsche Bundesbank Dr Reimut Jochimsen, General Director of the Czech National Bank Dr Miroslav Hrn_í_, Head of the London branch of the Sumitomo Bank Takayuki Tsukuda and Member of Riigikogu (the Parliament) Siim Kallas. The discussion was led by the economic adviser to the Estonian Prime Minister, Ardo Hansson.

The material presented at the conference will be published in a separate booklet.

19 JUNE

Riigikogu passed the 1997 additional budget which amounted to 70 million kroons. 65 million kroons of the additional budget came from the income tax revenue. The majority of the additional budget (56.1 million kroons) was allocated to the government's reserve fund.

26 JUNE

Decree of the President of Eesti Pank
On the Security of Domestic Payments between Credit Institutions

Proceeding from the decrees of the President of Eesti Pank from 13 December 1996, On Establishing Instructions for Forwarding and Receiving Payment Orders (see Eesti Pank Bulletin No 1 (28), 1997, p 4) and from 12 February 1997, On Endorsing the Instructions for Compiling the Bank Statement (see Eesti Pank Bulletin No 2 (29), 1997, p 6), the Decree specified the terms of securing domestic electronic payments between credit institutions, the instructions on managing the keys used in the security procedures and the respective regulations. All the above documents took effect on 30 June 1997.

At the same time, the Decree of the President of Eesti Pank from 26 March 1997, On the Security of Domestic Electronic Payments between Credit Institutions and the amendments to the above decree from 30 May 1997, were invalidated.