Skopje, 26 December 2024 

The stability of the denar is guaranteed thanks to the capacity and the set of instruments available to the National Bank uses to defend the exchange rate of the domestic currency, focusing on foreign reserves, which are this year around 40% above the pre-pandemic level.  The inflation is expected to gradually stabilize next year as well.  The future monetary policy will depend on inflation and the foreign exchange market.  This was pointed out by the Governor Anita Angelovska Bezhoska in an interview for the Macedonian television.  

As the Governor underscored, despite numerous challenges, the National Bank successfully maintained the macroeconomic stability and the stability of the domestic currency’s exchange rate against the euro.  Speaking of the level of foreign reserves, as a key instrument for maintaining the exchange rate stability, the Governor pointed out that it is significantly higher compared to the pre-pandemic period and underlined that it is due to the National Banks ongoing foreign currency purchase on the market in the last two years, amid a significantly more stable balance of payments, particularly in the trade account, remittances, as well as solid foreign investments.  

Regarding inflation, the Governor pointed out that after the average inflation of 9.4% last year, it amounted to 3.4% in the first nine months of this year, with further gradual deceleration expected next year.  However, the Governor pointed to certain risks.  “It is important to note that primary commodity prices are significantly affected by the geopolitical developments, and this segment is still fragile, with significant uncertainty that requires increased attention.  Domestic factors, especially the labor market, are additional risk sources that require special attention in order to avoid new inflation waves”, said Angelovska Bezhoska.

The Governor highlighted that the monetary policy setup will remain closely tied to inflation and the foreign exchange market.  “If favorable trends continue, without larger external and domestic shocks, there will certainly be room for further monetary policy loosening” said the Governor Angelovska Bezhoska.