Skopje, 29 July 2023

The denar remains stable, while foreign reserves are at an appropriate level.  The National Bank monetary policy, as well as the reduced pressures from import prices, contributed to inflation slowdown, which is expected to further decelerate.  The non-performing loans to banks’ balance sheets remain low, while the capital adequacy in the banking sector is solid and stable.  These are some of the assessments in the Standard & Poor's Agency Report that confirms the credit rating of the country BB- with a stable outlook. 

The report states the Agency’s expectations for further maintenance of the exchange rate stability, despite the challenges from external environment.  The growth of foreign reserves is also pronounced, which amounted to 4.2 billion euros in June 2023. The National Bank interventions on the domestic foreign exchange market are also pointed out as growth factors, as well as the use of external sources for financing the fiscal policy.  According to Standard & Poor's expectations, foreign reserves remain stable and at the required level.

After reaching a peak at the end of the last year, the inflation started to slow down gradually and reduced to 9.3% in June, according to Standard & Poor's. This trend is expected to continue, due to the reduced import inflationary pressures and monetary policy tightening by the National Bank, which is in line with the European Central Bank policy.

The report also perceives the current situation in the banking system, focusing on its security and stability, which is evident from the low level of non-performing loans of only 2.8%, as well as the solid and stable banks’ capital adequacy ratio of 18%.  Moreover, the report highlights measures that the National Bank took to encourage savings in domestic currency and to reduce euroization in the financial system, through changes in the reserve requirement rates of the banks.