We made the decision on further monetary relaxation, i.e. to reduce the key interest rate, in conditions of stable movements on the foreign exchange market, moderate and stable dynamics of inflation, as well as constant growth of deposits in the banking system. We expect that this step will contribute to reducing the cost of financing of households and companies through bank loans, in order to overcome the crisis more easily.

This was emphasized by the Vice Governor of the National Bank, Emilija Nacevska, in an interview with “Kapital”.

“The current experience shows that the commercial banks follow the signals of the National Bank. Of course, we cannot expect an instant reaction, i.e. some time is usually needed in order for the banks to make the appropriate adjustments to their interest rates. However, I would mention that the financial sector is a very important intermediator in the successful maintenance of the stability of the domestic economy in the current crisis and encouraging of the economic growth.” - Nacevska said.

In her interview, she emphasizes that, despite the uncertainty arising from the health crisis, the economic flows are currently stable, without major deviations in the key macroeconomic parameters in terms of the expectations.

“We are witnesses that the epidemiological situation worsened again, which conditioned reintroduction of some of the restrictive measures both globally and in our country. However, we should bear in mind that the measures are still less restrictive than those that were taken in the second quarter from the last year. At the moment, it is difficult to assess whether they will cause a major change in our expectations for the economic growth. Of course that we are aware of the unpredictability we face, since this crisis by its genesis is of non-economic character. That is why we also make alternative scenarios, in which we stress the extremely high uncertainty about the effects of the prolonged health crisis on the economy.” - the Vice Governor said.

Regarding the questions for possible additional prolongation of the corona-crisis, among other things, Nacevska underlines that the central bank has instruments for an additional reaction, if necessary.

“Like any other central bank we have portfolio of instruments through which we can act in order to provide liquidity in the system, such as repo transactions, and we also have the set of macro-prudential instruments at our disposal for target action. It is favorable that in our country the key interest rate is still positive, which leaves room for further action of the National Bank through this instrument, if necessary.” - the Vice Governor said.

In her interview, she mentions that the decisions that the National Bank has adopted to support the economy in dealing with the crisis currently give good results, and the situation is closely monitored.

The interview is available at the following link: https://kapital.mk/%d0%b5%d0%bc%d0%b8%d0%bb%d0%b8%d1%98%d0%b0-%d0%bd%d0%b0%d1%86%d0%b5%d0%b2%d1%81%d0%ba%d0%b0-%d0%bf%d1%80%d0%be%d0%bb%d0%be%d0%bd%d0%b3%d0%b8%d1%80%d0%b0%d1%9a%d0%b5%d1%82%d0%be-%d0%bd%d0%b0-%d0%bf/