The monetary policy stance is appropriate and the banking system is healthy, said the IMF staff during the mission to our country within the regular annual review of the Macedonian economy. Over the past few days, the IMF staff had several working meetings with representatives of the National Bank and the Ministry of Finance.

The Concluding Statement of the IMF staff also points to the fact that the National Bank has appropriately used the favorable conditions to accumulate reserves. Going forward, should the external environment worsen, the National Bank should stand ready to tighten monetary policy.

The IMF staff also concludes that the banking system is healthy, well capitalized and liquid. The ongoing bank mergers and acquisitions will help consolidate the system and improve efficiency. Moreover, steps to further increase deposit denarization, coupled with carefully calibrated measures to curb foreign currency lending to households, if needed, would help strengthen financial system resilience.

The IMF staff also concludes that further strengthening the financial stability framework remains a priority. Also, there was a positive assessment of the activities to enhance the supervisory and regulatory framework. These activities were undertaken in line with the 2018 Financial Sector Assessment Program (FSAP). Furthermore, legislation is being prepared to strengthen the macroprudential mandate of the National Bank, to be accompanied by better systemic risks identification in the banking system.

The IMF staff stresses the importance of the commitment of our country to the reforms. As noted, crucial institutional and governance reforms have demonstrated their commitment to tackle long-standing challenges. The IMF staff says that it is essential to stay on the path of reform to further bolster the economy’s resilience to shocks.

IMF Staff Concluding Statement of the 2019 Article IV Mission (link)