The National Bank of the Republic of Macedonia Council held its second session today.
Skopje, 23 February 2011
Press release of the NBRM
The National Bank of the Republic of Macedonia Council held its second session today.
At the session of the National Bank Council, Decision on approving annual account and financial statements of the National Bank of the Republic of Macedonia for 2010, which were subject to audit, was adopted. The report of the independent auditor PriceWaterhouseCoopers DOO Skopje on the financial statements of the National Bank of the Republic of Macedonia was adopted. According to the opinion of the independent auditor, the financial statements of the National Bank of the Republic of Macedonia in all material aspects provide real and objective image of the financial standing as of December 31,2010, the financial performance and cash flow for the past year in line with the International Financial Reporting Standards.
The Council also discussed the Information on the realization of the Financial Plan and the Information on meeting the fixed assets investment plan of the National Bank of the Republic of Macedonia for 2010. At today's session, the National Bank Council was informed on the latest macroeconomic movements. The data on the inflation from January 2011 showed continuation of the trend of increase in the general price level, which commenced in August 2010. The monthly inflation equals 0.9%, while on annual basis, the inflation equals 3.2%. According to the expectations, the price movements mostly arise from the mounting dynamics of the food prices, moved by the increase in the import prices. The inflation movements so far point to slightly higher inflation compared to the last projections. However, the deviations are not big, with the base inflation (without food and energy) being still low, and its annual increase declined from 0.9% in December to 0.8% in January. From the aspect of the economic activity indicators, they give different signals. However, so far the trends point to maintenance of the positive growth dynamics in the last quarter, which is in conformity with the projections. From the aspect of the individual indicators, in the third quarter, growth slowdown with the wholesale and telecommunications was registered. On the other hand, the annual drop in the industrial output deepened, the activity in the retail sale fell, opposite to the rise in the previous quarter, while the growth slowdown was registered with the activity in the construction sector. The data for the balance of payments for the October - November 2010 period showed deficit in the current account of 0.7% of GDP, which is a narrowing of 0.4 p.p. of GDP compared to the same period of the previous year. Within this period, the capital flows equaled 0.5% of GDP. Although the capital inflows in the October - November period were not sufficient to cover the current deficit, and the trade deficit in December widened, however, in the last quarter, net purchase of foreign exchange on the foreign exchange market was performed, while the foreign reserves registered an increase. Such movements point to additional foreign exchange inflows in the economy in the last month of the year, which compensated the unfavorable movements within October - November period. The favorable tendencies on the foreign exchange market continued also in January and February 2010. Except to two interventions with net purchase of foreign exchange in January, no transactions of the National Bank with the commercial banks on the foreign exchange market were realized. However, the foreign reserves registered slight fall compared to the end of the preceding quarter, as a result of the valuation effect. Such changes deviate from the projections, according to which decrease in the foreign reserves in the first quarter is expected, thus indicating to the possibility for more favorable position of the balance of payments in this period than expected. According to the last data, the gross foreign reserves equaled Euro 1,712 million on February 11,2011.
In January 2011, the banks' credit activity stagnated. Thus the balance of the total lending to the private sector is unchanged at the end of January compared to the end of the previous year. On the other hand, slight positive monthly change was registered also with the banks' total deposit potential, which in January registered monthly rise of 0.3%. In comparison with the same month of the previous year, the total loans are higher by 6.8%, with acceleration of the credit growth up to 8.4%h being expected at the end of the month. The annual increase in the total deposits in January equals 12.9%, while to the end of the quarter it is estimated to reach 13.1%. In January 2010, no larger changes with the interest rates were registered. However, the interest rates on the newly extended credits continued to fall, given the simultaneous rise in the value of the newly accepted deposits.
The Council also adopted the Decision on amending the Decision on issuing approval to a bank ("Official Gazette of the Republic of Macedonia" no. 91/2007, 134/2007 and 139/2008). The most important changes refer to the procedure and documentation for issuing approval for: amending the bank's statute, appointing member of both the Supervisory Board and the Boart of Directors of a bank. Also, this Decision complied with the amendments to the Banking Law with respect to the limitation for a person against whom the following addition penalty is pronounced: ban on obtaining bank founding and operating license, revocation of bank founding and operating license, ban on founding new legal entities and temporary or permanent ban on performing bank activities, who can not be a shareholder with qualified holding in a bank.
Governor's Office