Skopje, 23 December 2022 

The National Bank is actively involved in the activities of the working groups by individual chapters and areas in the current process of the bilateral phase of the analytical review of the legislation (screening) with the European Union. Within the first cluster - Fundamental Values, the Chief Economist, Aneta Krstevska and the Manager of the Financial Stability and Macroprudential Policy Department at the National Bank, Natasha Andreeva participated with their own presentations in the bilateral phase of the analytical review for the area of "economic criteria".

In the part concerning macroeconomic stability, the emphasis was placed on its constant maintenance in the past decades, as a reflection of the sound and prudent policies, but also of the undertaken structural reforms that increase the resilience of the economy to shocks. Regarding the price stability, it was emphasized that the average inflation has been at a low and stable level for years. An exception is the last year, when the higher inflation is a global phenomenon, primarily due to factors on the supply side. But, due to the long-term effect of these factors, inflation becomes more prevalent and affects inflation expectations, which imposes a need for monetary tightening globally and in our country. The monetary policy setup of the National Bank in the latest Report of the European Union was assessed as appropriate. Also, the external sector developments were presented, thus emphasizing the constant maintenance of the foreign reserves at the adequate level, which is especially important for a central bank that applies an exchange rate targeting strategy.

In the part concerning financial stability, the progress in the field of macro-prudential infrastructure was presented, achieved with the entry into force of the Law on Financial Stability, in August 2022. It was pointed out that this Law legally frames the existing Financial Stability Committee as an inter-institutional body responsible for implementation and monitoring of the macro-prudential policy and coordination of the activities for identifying and monitoring the systemic risks in the financial system, taking macro-prudential measures and managing the financial crisis. An important novelty is that the Law assigns a mandate to the competent authorities to undertake macroprudential measures for their relevant segments, regulating the macroprudential mandate of the National Bank in the banking area and the other competencies established by the Law. The National Bank plays a leading role in creating and implementing macro-prudential policy and in monitoring and maintaining financial stability. A review of the structure of the financial system and of the importance of the banking system to the overall financial stability was also given. It was underlined that the banking sector managed well the risks from the pandemic and its activities have been increasing even in the current conditions imposed by the global energy crisis. The main pillars of banks' stability are the high and stable liquidity and solvency.

Chapters and areas from the first cluster are opened first, and will be closed last. In the area of "economic criteria", the application and the effects of the regulation implemented in various economic areas are reviewed, as well as the effects of the implementation of certain policies, strategies and reform activities in the economy. The goal is through monitoring of the trends to assess the progress and gradually converge the domestic economy to a functional market economy and increase the ability to face competitive pressures and market forces in the EU.