Skopje, 13 October 2022
Denar stability has been successfully maintained even during the current economic crisis, which is due to the appropriate level of foreign reserves and the central bank capacity to successfully defend the exchange rate. For decades, the denar has been stable against the euro, as the currency of our major trading partner. This is the most favorable monetary strategy for our economy, says the National Bank Governor, Anita Angelovska Bezhoska, who is participating in the Annual Meetings of the International Monetary Fund and the World Bank Group in Washington, D.C., in an interview with Voice of America.
"We have maintained a stable denar for two and a half decades, which clearly shows that the central bank has both the capacity and instruments to defend the denar exchange rate. Moreover, the level of foreign reserves, as the key instrument that serves as a guarantee for maintaining exchange rate stability, plays the crucial role. They have been maintained at a high level, they are twice as high as that in the global financial crisis of 2008 - 2009, and they are also higher than the pre-pandemic period. Besides, the European Central Bank (ECB) has also provided euro liquidity in the form of a repo line which has not been used so far, but can be used if we need it," says the governor.
Speaking about the trend of appreciation of the US dollar that started late last year and accelerated this year, Governor Angelovska Bezhoska pointed to several reasons.
"These trends tend to affect economies that are net debtors in US dollars, that is, whose liabilities exceed claims in US dollars. This is not the case with the Macedonian economy, because the US dollars account for only about 8% of the total external debt of our economy, mainly in the public sector. The share of US dollar in total foreign trade, exports and imports, is also relatively smaller and amounts to 8 - 9%, while the remaining trade is in euros. There is a long-term stability of the denar - euro rate and hence, it does not affect that part of the trade," says the governor.
Analyzing the more pronounced downward risks to the global economy and the impact on our economy, the governor said that it is especially important how the European Union, as our major trading partner, which is actually very sensitive to the energy crisis, will address these shocks. She pointed out that the central bank is working on new macroeconomic forecasts that will be completed next month.