Governor Slaveski: Monetary setup remains appropriate, foreign reserves over Euro 5 billion

Regarding the stability of the economy and the exchange rate, Slaveski emphasized that foreign reserves are at the level of about Euro 5.1 billion, which is approximately twice more than the pre-pandemic level in 2019. They are an important instrument to maintain the stability of the nominal exchange rate, with the National Bank intervening in the foreign exchange market with sales or purchase of foreign currency, depending on the market conditions.

As he pointed out, the growth of reserves is supported by the favorable developments in the external sector - export and import, foreign direct investments and portfolio investments. “Not only that we compensated what we spent for interventions but also foreign reserves significantly increased”, Slaveski said, adding that such tendencies are important to maintain macroeconomic stability.

Regarding the inflation, the latest data show moderate movements. The annual inflation equaled 2.3% and 2.6% in July and August, respectively, which means that prices in August compared to July increased by 0.4%. According to the Governor, August data show relatively limited transmission of the turbulences related to the movements of the prices of energy and crude oil on domestic prices.

Slaveski emphasized that the National Bank monitors the situation and that if necessary, it can respond with the instruments at its disposal. Besides the policy rate, they also include the macro-prudential policy measures, aimed at maintaining the banking sector stability and managing the private sector indebtedness.

The Governor also referred to the growth of the Macedonian economy of 4.3% in the second quarter, assessing that it is positive that the economy registers solid growth amid great uncertainty in the world economy. As he pointed out, the growth is primarily driven by gross investments, especially in infrastructure, but also by private consumption. It is affected by the growth of disposable income, wages and pensions, as well as the increased lending to households and businesses.

“It is good that amid great uncertainty in the world economy, the Macedonian economy registers solid growth, the Governor said.