Changes to the National Bank policy rate

The National Bank of the Republic of North Macedonia adjusts the monetary policy setup to ensure the maintenance of price stability, as legally defined main monetary objective. For achieving the main objective, the National Bank applies the monetary strategy of targeting the nominal exchange rate of the Denar against the Euro. Except for price stability, the National Bank also takes care of the maintenance of the financial stability in the country, as a legal objective, subordinated to the primary objective. This means that in defining and adopting the monetary measures, the National Bank intends to make them contribute to maintaining a stable and competitive market-oriented financial system. The National Bank also supports the general economic policy without jeopardizing the achievement of the primary objective and in line with the principle of open market economy with free competition. 

In achieving its monetary objectives, the National Bank applies various monetary regulation instruments. The policy rate of the National Bank, which is the interest rate on the CB bills, is the main instrument of the monetary policy of the National Bank. The National Bank takes decisions on the level of the key interest rate on a regular basis, in accordance with the Indicative Calendar of meetings of the Executive Board of Monetary Policy (starting from June 2024, in accordance with the amendments to the Law on the National Bank of 10 April 2024, and previously in the meetings of the Operational Monetary Policy Committee - OMPC) at which it decides on the monetary policy setup. This means that the latest available data for the key macroeconomic and financial indicators and their significance in the light of the current macroeconomic forecasts are analyzed on a regular basis. Also, the risks and the likelihood of their materialization are reassessed and on the basis of all this information, an assessment of the monetary policy setup is made.

Decisions on the level of the key interest rate are announced by a press release published on the website of the National Bank. The announcement contains a brief systematic review of the key factors and considerations that were taken into account when taking the actual decision. More detailed information on the perceptions and the assessments of the National Bank related to the monetary decision-making process can be found in two different reports, the Quarterly Report of the National Bank and the Recent Macroeconomic Indicators - Review of the Current Situation. The analyses presented in these two reports form the basis of the information used in making monetary decisions, and are published and accessible to the general public. By their publication, the National Bank seeks to contribute to easier understanding of the monetary decision-making process by the general public, more efficient monitoring and assessment of the monetary policy performance and more effective monetary transmission. 

The Quarterly Report is prepared and published four times a year. The Quarterly Report contains analysis of the latest macroeconomic developments, explains the monetary policy setup in the relevant quarter and the factors influencing it, and includes annexes containing analyses of current topics in the field of macroeconomics, finance and monetary policy. The most important element of the Report are the macroeconomic forecasts, as a significant tool in the monetary decision-making process, and they are prepared twice a year, in May and November. 

The Report Recent Macroeconomic Indicators - Review of the Current Situation analyzes the latest information on the macroeconomic developments in the country and abroad and their impact on the estimated macroeconomic environment, in line with the latest round of macroeconomic forecasts, as well as on the National Bank's monetary policy setup in the period between the two rounds of comprehensive macroeconomic forecasts.