Dear guests and colleagues,
It is my honor to welcome you to the ceremony marking the 25th anniversary of the monetary independence of the Republic of Macedonia.
We always look back at this event with the greatest pleasure and pride as one of the historical moments that marked the beginning of the economic and monetary history of the modern Macedonian state. On this day, exactly 25 years ago, the Parliament of the Republic of Macedonia adopted legal acts as prerequisite for the development and implementation of an independent monetary policy by the National Bank of the Republic of Macedonia, as the monetary authority of an independent and sovereign Macedonia. Monetary independence took place soon after the historic independence referendum and the adoption of the Constitution of the Republic of Macedonia, and along with the stabilization program, set the economic priorities of the first Macedonian government of experts, who set up foundation for the new market economy.
Just a reminder, the monetary independence of the Macedonian economy took place against the background of extremely difficult economic circumstances of inherited concerns and new challenges, market narrowing, disruption of trade relations amid war in the former federation and UN sanctions to the Federal Republic of Yugoslavia. It all had huge repercussions on the fragile economy that just got out of the long-lasting crisis in Yugoslavia. This reminder however is more for the younger generations, and I believe that for all active eminent experts of that period, some of them here with us tonight, this is a period that is deeply engraved in the memory as an extremely complex period that required real long-term solutions.
Monetary independence is, most likely and naturally, associated with the birth of the Macedonian denar. Within only a few days after the denar was declared the currency of the Republic of Macedonia in late April 1992, the Yugoslav dinars were replaced by Macedonian denars, temporarily introduced as coupons. The final denar banknotes and coins were introduced almost a year later, in May 1993, when the coupons were gradually withdrawn.
At the systemic level, macroeconomic stabilization was considered a necessity, as the primary prerequisite for all further monetary and economic endeavors and reforms. Consequently, that same month, April 1992, the Parliament of the Republic of Macedonia adopted its first anti-inflation program that required radical stabilization measures, including restrictive monetary policy, cuts in public spending, wage freezes and limited price freezes. Just a few months after the introduction of this program, inflation slowed down and the exchange rate on the unofficial market reduced. However, with the collapse of the government of experts, in the third quarter of the year, this process was interrupted, but continued throughout 1993, with the new stabilization measures of the new coalition government and the first arrangements with the IMF and the World Bank. In 1995, we perceived signs of macroeconomic stabilization, namely, a single-digit annual inflation, stable exchange rate after the switch to the strategy of exchange rate targeting, strengthened reserves, control over monetary aggregates and consolidation of the fiscal sector.
The first Law on the National Bank of the Republic of Macedonia instituted the central bank as an independent institution responsible for the monetary policy and the choice of monetary regulation instruments, with the ultimate objective - maintaining price stability. This legal framework was a solid basis for building a modern central bank that follows the trends in central banking and is committed to achieving its goals.
It is noteworthy that these substantial macroeconomic benefits have been preserved to this day. In the past two decades, the average inflation of the Macedonian economy has been maintained at 2%, which is the medium-term objective of the euro area, and the exchange rate of the denar against the euro as a nominal anchor in the economy, has remained stable. In recent years, it has been achieved with negligible interventions of the National Bank on the foreign exchange market. Foreign reserves are at a comfortable level. The banking system has constantly strengthened, even during the global crisis, its intermediary role in the economy, amid growth of savings and solid credit support to the private sector.
For 25 years now, the National Bank has remained steadfast in its commitment to maintaining price stability, as well as safe and sound banking system, which in turn makes it credible in the public. Shocks that we have faced over time stimulated greater flexibility, and increased perspectives and ability for timely action and overcoming of each successive contingency. Also, constant endeavors have been made to strengthen institutional capacity in the context of dynamic global environment, financial trends and increasingly complex tasks.
Today the central bank has contemporary monetary tools, developed macroeconomic forecasting, modern system of foreign reserves management, operational and updated (dual-currency) payment system, rich statistical base, developed research activities, risk-based supervision, modern banking regulation harmonized with the Basel and European requirements, application of standards in all areas of operation. We can rightly say that today the National Bank of the Republic of Macedonia enjoys an excellent reputation in central banking circles. At the same time, the National Bank policies and measures have been positively assessed by international financial institutions. We are proud of the results achieved, and are ready to persist, and cope with any future challenges. We continue with our projects and reforms, thus contributing to the strengthening and modernization of the economy. We continue to operate as an independent, transparent and socially responsible institution, which, with all intellectual capacity, remains open to cooperate with all other entities within the scope of its powers, and focused on the further development of the banking and financial system and the economy as a whole.
With this brief overview of the past, I believe many of you have evoked memories of a historically significant time. As I have already mentioned, each period has its own challenges, but only some of them has historical significance. Changes made in April 1992, laid the foundations of modern central banking and modern market-oriented economy of the Republic of Macedonia. Decisions and changes made in April 1992 were a prerequisite for all other monetary and financial reforms that followed.
On the occasion of 25 years of monetary independence of the Republic of Macedonia, the National Bank would like to express gratitude to the members of the Monetary Independence Committee, the senior management of the National Bank and the authors of the first Anti-Inflationary Program, for the prominent role and contribution to the process of monetary independence.
Therefore, we would like to present a posthumous recognition awards to:
Academician Nikola Kljusev, then President of the Government of the Republic of Macedonia and member of the Monetary Independence Committee,
Academician Ksente Bogoev, then president of the Macedonian Academy of Sciences and Arts and member of the Monetary Independence Committee, and
Mr. Metodija Toshevski, then Minister of Finance and member of the Monetary Independence Committee.
We also take this opportunity to present recognition awards to:
Prof. Lube Trpeski, PhD, member of the Monetary Independence Committee,
Mr. Borko Stanoevski, then Governor and member of the Monetary Independence Committee,
Prof. Tome Nenovski, PhD, then Deputy Governor,
Prof. Mihail Petkovski, PhD, author of the first Anti-Inflationary Program,
Academician Goce Petrevski, author of the first Anti-Inflationary Program, and
Prof. Trajko Slaveski, PhD, author of the first Anti-Inflationary Program.
Congratulations on the 25th anniversary of the monetary independence of the Republic of Macedonia!
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