Skopje, 3 February 2022
The National Bank Council has held its regular session and has discussed and adopted the latest Quarterly Report for the last quarter of 2021.
The Report points out that the accommodative character of the monetary policy was maintained also in the last quarter. Such monetary setup since the beginning of the pandemic continually contributes to supporting credit flows and maintaining liquidity in the banking system, in order to mitigate the effects of the pandemic on the domestic economy. Moreover, the relaxed nature of the monetary policy, as well as the sound solvency and liquidity position of banks, are factors that continue to have a stimulating impact on the credit supply. On an annual basis, the credit growth at the end of the fourth quarter was 8.3%, which is above the forecasted annual growth according to the October forecast of 7.1%. These movements are also supported by solid growth of the deposit base, as the main source of financing of the banking system. Namely, the annual growth of total deposits at the end of December reached 7.5%, which is above the forecasted growth with the October forecast of 7.1%.
The relaxed character of the monetary policy was carried out in conditions of a solid level of foreign reserves, which are in the safe zone, at a growth pace in the last quarter that is better than expected with the latest forecasts. Regarding the price movements, there were upward price movements in the last quarter, which are mainly due to the factors on the supply side. Moreover, the fourth quarter of 2021 registered an acceleration in inflation as a result of the trends in the food and energy component and the temporary mismatch of supply and demand, caused by the pandemic. Given the current recovery dynamics of the domestic economy and of the labor market, for the time being no significant pressures from the demand on the price growth are perceived. This is also indicated by the movements in core inflation, which, unlike the general price level, registers slightly more moderate dynamics than expected. At the same time, domestic inflation is in line with the price movements registered in the euro area. However, given the uncertainty and volatility of the factors that affect the price level, there are upward risks to the inflation. The National Bank carefully monitors inflation developments, and will take appropriate measures if necessary.
The Report states that the economy is gradually recovering, with relatively limited effects of the new waves of spreading of the infection, amid further immunization, target and less restrictive measures and adjustment of the behavior and habits of entities, as well as further accommodative character of policies. Uncertainty and risks persist, both globally and in the domestic economy, and are mainly associated with the future course of the pandemic. The National Bank continues to carefully monitor the developments and risks in the domestic and external environment, in order to adequately adjust the monetary policy setup.
The National Bank Council also adopted the new Compliance Policy of the National Bank, a document that regulates the process of providing compliance of the operations with the ethical, professional and legal obligations of the institution. The Compliance Policy elaborates and improves the established systematized process for preventive monitoring and provision of legal and ethically harmonized operations in the National Bank. The National Bank, as a central bank, continuously works on providing a high level of compliance and integrity in the operations, which also contributes to appropriate performance of its objectives and tasks and strengthening of the public confidence with respect to the operations of the National Bank.
At its session, the Council also discussed and adopted other materials from the scope of the bank's operations.