Skopje, 2 November 2020 

This is first crisis where the initial response of our central bank is to loosen rather than to tighten monetary policy. For instance, during the global financial crisis, lower capital inflows in the Macedonian economy and increased propensity of economic agents to euro at that time increased the interest rate to stabilize expectations, which in turn raised interest rates on loans and decelerated credit support. Now the situation is different, because we have faced COVID-19 crisis with high and adequate level of foreign reserves, stronger economic fundamentals and absence of imbalances as seen through the solid foreign position of the economy and moderate inflation.

This, among other things, was emphasized by the National Bank Governor Anita Angelovska Bezhoska, at the Governor’s panel discussion at the e-conference Covid-19: The impact on the economy and central bank policies hosted by the London School of Economics and Political Science and Bank of Albania. 

In her speech, Angelovska Bezhoska focused on the of central bank policies in the region during the current crisis, referring to the effects achieved so far, as well as the monetary policy challenges in the mid-term.

 “Given the severity of the shock caused by the pandemic, the lessons learned from the global financial crisis and the unconventional toolkit already at hand, this time, the monetary response in the region was faster and stronger, and better aligned with the fiscal policy”, said the Governor.

Reflecting on the effects of the monetary measures, Governor Angelovska Bezhoska emphasized that among other things, they prevented funding costs from increasing, i.e. the interest rates continued to decrease and the solid credit support remained. Thus, credit growth continued increasing steadily in almost all countries in the region, at an average rate of about 6.2%, and in our country it even accelerated to 7.3%.

Also, besides emphasizing that the protraction of the health crisis creates pronounced uncertainty both globally and regionally, several segments were also tackled that will require special attention by policy makers in the period ahead.

Thus, the need for further strengthening of economic fundamentals and economic resilience against future shocks was also noted, especially through continuation of structural reforms.

As part of the conference, the Governor exchanged views with her central bank colleagues on a number of current issues related to the economic challenges posed by the COVID-19 pandemic, including the importance of the access to euro liquidity which the National Bank provided from the European Central Bank.