Skopje, 11 November 2021

Foreign reserves, which are the key factor on which the stability of the denar against the euro depends, are maintained at the historically highest level of Euro 3.6 billion. They are more than twice higher than in the global financial crisis in 2008/2009, and the National Bank also has additional mechanisms for support of the foreign reserves and maintenance of the stability of the domestic currency. The denar has been stable for years and will also be stable in the coming period.

This was emphasized by the Governor of the National Bank, Anita Angelovska Bezhoska, in last night’s edition of the show “Economic Magazine” on the Alsat-M television, which was dedicated to the latest forecasts and assessments of the National Bank for the situation and developments in the Macedonian economy.

The Governor also stressed that in any crisis, due to speculation, the question of the stability of the denar is raised, which is detrimental to all of us, primarily the citizens who would be unnecessarily exposed to costs for conversion of denars into foreign currency. There was such speculation also during this crisis, but in contrast, the data for the current period and the forecasts for the next years also point to a high and adequate level of the foreign reserves, which is a guarantee for the stability of the domestic currency.

"In 2008 and 2009, when we faced the global financial crisis, then the level of foreign reserves was almost half of what we have today. It shows by itself that the capacity of the government to deal with any shocks, including the speculations we usually face in certain crisis situations, is enormous to deal with such challenges. The foreign reserves are at a level of around Euro 3.6 billion, which is more than twice higher than what we had in 2008 when they equaled about Euro 1.5 billion. Compared as a percentage of the gross domestic product, then they equaled about 23% of GDP, and now they are maintained at the level of 30%.” - Angelovska Bezhoska said.

She reminded that the National Bank also has additional mechanisms at its disposal by the European Central Bank - the repo line or quite simply, the access to foreign currency liquidity, if necessary.

"For the first time, this repo line was provided to us last year. It was on the initiative of our central bank, which was also supported by the other countries in the Western Balkans and together we submitted a request to the European Central Bank and a great step was made in this respect, for support of the foreign reserves and the stability of the domestic currency. So far, we have not used funds from this repo line, which is also an additional confirmation of the adequate level of foreign reserves.” - the Governor said.

Regarding the latest macroeconomic forecasts of the National Bank, in the show, the participants also discussed the inflation forecast, as well as the forecast for the economic growth.

The Governor stressed that the National Bank expects that inflation will remain moderate, which is also in line with the expectations of the International Monetary Fund - already the next year the inflation would slow down, and then it would be reduced to the historical average of about 2%.