Skopje, 1 December 2003

Press release of the NBRM

egarding the announcements released by certain electronic and written media during the past few days that the foreign exchange reserves have been allegedly endangered because they were used for defending the Denar exchange rate, with this press release the National Bank of the Republic of Macedonia would like to clarify the following: 

On the foreign exchange market of the Republic of Macedonia, as well as on other international markets, there is a seasonal disparity between the supply of and the demand for foreign exchange during the year depending on the export and the import activities of the domestic economy. Thus during the third quarter of the year, having in mind the higher supply than the demand for foreign exchange, the National Bank purchased US Dollar 46.6 million in order to prevent an appreciation of the Denar exchange rate. During the fourth quarter of the year, due to the higher demand for foreign exchange common for this period of the year, the National Bank mainly intervened on the part of the supply by sale of foreign exchange on the foreign exchange market, which is much lower than the purchase registered in the third quarter.

What we want to emphasize is that the National Bank maintains the foreign exchange reserves at the level of a four-month coverage of the import of goods and services, which is supported and acknowledged by the conclusion and the continuation of the arrangements with the IMF. Such a level of foreign exchange reserves gives comfort in the interventions on the foreign exchange market and maintenance of the foreign exchange liquidity of the country, as well as a stable foreign exchange rate. 

In order to inform the public, we would like to indicate that with the reforms introduced on the foreign exchange market at the beginning of the year, the National Bank publishes the information on its participation and the participation of the commercial banks on the foreign exchange market, as well as the quoted and realized exchange rates transparently and on a daily basis on its web site: www.nbrm.gov.mk. In this manner, the agents can obtain daily information on the quoted exchange rates with which the commercial banks and the National Bank as an active participant on the market, are present and trade. Such a transparent and everyday functioning of the foreign exchange market gave remarkable results in maintaining the stability of the foreign exchange rate and in reducing the differences in the exchange rates on the markets with the commercial banks.

By using the intervention exchange rates, the National Bank intends to stimulate the trade with foreign exchange among the commercial banks and to intervene in last resort if there is a disparity in the global supply of or demand for foreign exchange.

On this occasion, the National Bank would like to inform the public that despite the high deficit in the foreign trade of the country, there is high foreign exchange liquidity in the banking sector as a result of other transactions of the country abroad. Namely, it is common for the Republic of Macedonia the net inflows based on the exchange offices operations, as well as other types of foreign exchange inflows not originating from trade, to range from 65% to 70% of the trade deficit.

Vice-Governor's Office
Emilija Nacevska