Yesterday, July, 10, 2012, the Operational Monetary Policy Committee held its regular session, discussing the recent macroeconomic indicators, banking system liquidity and developments on the international and domestic financial markets.

Skopje, 11 July 2012

Press release of the NBRM

Yesterday, July, 10, 2012, the Operational Monetary Policy Committee held its regular session, discussing the recent macroeconomic indicators, banking system liquidity and developments on the international and domestic financial markets.

The adverse effects of the euro area developments, apparent through the decrease of foreign demand for domestic products and the effects of extraordinary factors, such as unfavorable weather conditions, influenced the growth of domestic economy in the first quarter of the year. Thus, in the first quarter of 2012, GDP registered a real annual fall of 1.4%. The deterioration of global economic perspectives also created downward pressures on the primary commodity prices. In spite of the expectations, in the second quarter, oil price was decreasing, and along with the exhaustion of effect of one-off factors of the previous months resulted in annual inflation rate of 2.1% in June, which is around the projection for the second quarter. Foreign exchange market registered no significant pressures on the exchange rate, and the gross foreign reserves has been maintained at relatively stable and adequate level since the beginning of the year, making ample room for offsetting any adverse shock.

The last month, the international markets were under significant influence of the results of the parliamentary elections in Greece, the European Union Summit held at the end of the month and the measures to address the euro area debt crisis that have been undertaken by the European Central Banks. Yet, the global environment is still surrounded by uncertainty and volatile developments that require prudent conduct of monetary policy.

Domestic financial markets registered stable developments. Money market experienced higher interbank activity with longer maturities (between 7 and 30 days), with an increase being registered by the trade on secondary market. Banks actively used monetary instruments (CB bills, available deposit and overnight facilities, seven-day deposits and repo auctions), which indicates considerably improved flexibility during liquidity management.

Taking into account the recent developments, the Operational Monetary Policy Committee ascertained that the monetary policy setup is adequate, and kept the maximum interest rate on CB bills unchanged, at 3.75%. Also, to preserve the banking system liquidity at the level of reserve requirement liquidity projection for the next period, at the auction held on July 11, 2012, the amount of CB bills was set at the level of Denar 28,000 million, which is within the matured amount (of Denar 28,752 million).

  Governor's Office