Skopje, 28 September 2020 

For this and next year, even in the medium term, there are no expectations of major inflationary pressures, said the National Bank Governor, Anita Angelovska Bezhoska, in an interview with the Macedonian Radio and Television.

"Amid forecasts of economic contraction this year, we do not expect inflationary pressures caused by demand. Hence, in April, the central bank forecast inflation of around 0% for this year, followed by a gradual rise in prices of 2% in the medium term, which implies moderate, low and stable inflation. If we analyze the first eight months of this year, inflation averages 0.8%, with positive contribution of food prices, and negative contribution of energy prices, amid a sharp decline in energy prices on world stock markets, especially oil prices. Therefore, for this and the next year and in the medium term, there should not be any major inflationary pressures", stated Angelovska Bezhoska.

Regarding the economic activity, the Governor stressed that the performance of the Macedonian economy in the second quarter of this year was as expected by the National Bank.

"It is very important what happens next. Not only from the health aspect, but also with the developments in the economies that are trading partners of our economy, as well as the effectiveness of macroeconomic policies in mitigating any adverse effect of the corona crisis", stressed out Angelovska Bezhoska.

Otherwise, as she said, the October cycle of macroeconomic forecasts has just begun and after it is completed, the National Bank will announce more specific views and expectations for the upcoming period.

In the interview, the Governor also referred to the access to foreign currency liquidity in euros, which is provided to the National Bank through a special instrument of the European Central Bank and is extremely important, because it allows a quick access to liquidity in euros if necessary. Currently, the interest rate on the funds provided by the ECB is 0%.

"This provides room for a more relaxed monetary policy, which for sure makes a significant contribution to maintaining more favorable financial conditions - a monetary policy that helps provide credit support to both households and businesses, and allows lending under favorable financial conditions", said Angelovska Bezhoska.

Amid solid growth of deposits, as the main source for financing loans, as the Governor pointed out, the trend of solid credit growth continues with greater focus on the corporate sector.

"There is no tightening of interest rate conditions, as opposed to the tightening of foreign financial markets - the average interest rate on loans, this year continues to follow a moderate downward trajectory", said Angelovska Bezhoska.

A video of the interview is available here.