Skopje, 4 December 2022

"The National Bank belongs to the group of rare countries that has started to normalize the monetary policy since the end of last year through a gradual withdrawal of liquidity. The international financial institutions confirm that the reaction of our central bank to inflation is timely and appropriate, in fact, if it was not so, we would have not even qualified for the IMF’s Precautionary and Liquidity Line”, the Vice Governor Ana Mitreska said in an interview for "Bloomberg Adria". She said that as a result of the monetary policy tightening, a moderate upward trend is already being registered in the interest rates of newly approved loans and newly received deposits, while no reduced lending is expected, but the growth is expected to decelerate. 

"We started to increase the interest rate even before the European Central Bank did, and more resolutely than them." We have taken a series of other measures in the area of the reserve requirement to encourage denarization, but also in the area of strengthening the capital requirements for banks", Mitreska said, emphasizing that the monetary reaction to the shocks has been assessed as appropriate by the international financial institutions, as well as that otherwise, the country would have not been able to qualify for the International Monetary Fund's PLL arrangement.

The effects of the monetary policies are already evident mirrored through a moderate increase in interest rates on newly approved loans and newly received deposits, especially in denars, in accordance with the measures taken by the central bank to support denar savings.

"Monetary signals are transmitted with a certain time delay, which means that a certain adjustment of interest policies will probably follow in the next period as well." In terms of lending, we do not expect a decrease, but we do expect a growth slowdown given that we operate in an uncertain context, which will contribute to a moderate reduction in the propensity to borrow, in conditions of tightening of the financial conditions", Mitreska said, adding that "on the other hand, the banking system is in good condition and can support credit growth, therefore, with the latest macroeconomic forecast of the National Bank, the credit growth is not expected to decrease, but to slow down, i.e. this year somewhere up to 9.2%, and next year around 7% on an annual basis."