The National Bank of the Republic of Macedonia Council discussed several issues related to its operations at its session held today.

Skopje, 24 September 2009

Press release of the NBRM 

The National Bank of the Republic of Macedonia Council discussed several issues related to its operations at its session held today.

The Council discussed and adopted the Report on foreign reserve management in the first half of 2009. The foreign reserves have been managed under conditions of widening the economic crisis, the growing mistrust in the stability of the global financial system and the high uncertainty in the financial markets. Additionally, the foreign reserves registered a downtrend due to the permanent National Bank interventions on the foreign exchange market for conducting the monetary policy and the Denar exchange rate policy.  Under such circumstances, taking into account the primary meaning of safety and liquidity principles in the foreign reserves management, the foreign reserves were mainly placed in instruments such as high-quality government securities issued primarily by the governments of the Euro-area states and the USA and short-term deposits in central banks of the leading Euro-area states.  The liquidity portfolio assets in Euro were held at the required level by redirecting the inflows from the due securities of the investment portfolio. Foreign reserve management income totaled Euro 15.4 million.

NBRM Council was also informed on the latest developments in the Macedonian economy presented in the Monthly Report 08/2009. Thus, the analysis of the latest macroeconomic indicators shows that their developments follow the projected pace. Therefore, it is crucial to point to the changes in the external sector, where in spite of the unfavorable tendencies in the first quarter of the year, in the second quarter it registered positive developments. The above mainly refer to the import demand, which started to be downwardly revised in a faster pace, leading to an annual decrease of 27.6% in the trade deficit in the second quarter.  The private transfers also reported favorable developments which continued in July and August. Taking into account such tendencies in the external sector, in July and August, same as in June, the NBRM intervened on the foreign exchange market with a net-purchase of foreign currencies.  As of August 31, 2009, the gross foreign reserves totaled Euro 1,505 million, which is by Euro 10.1 million more compared to the end of 2008, thus for the first time since the beginning of the year, the foreign reserves have registered an aggregate growth. The import reduction corresponds with the negative pace of economic activity, which points to lessening of the import pressures though the domestic demand.  Observing the latest indicators for the economic activity, it could be asserted that they send various signals. Thus, the volume of industrial output in July was lower than that in June, which contributed to accelerating the aggregate fall in the industry, which in the first seven month equaled 13.3%. On the other hand, the latest June data on other sectors of the domestic economy (trade, construction and telecommunications) indicate certain monthly improvements; however, it is still too late to announce that the unfavorable trends are over. The price trends are in line with the changes in the economic activity. The latest August inflation data show continuation of the monthly downtrend of the price level, whereby the aggregate fall in the prices since the beginning of the year to August equals 0.3%. Analyzing the banking sector, the initial August data indicate monthly increase in the banks' deposit potential of 2.8%, whereas the monthly lending reduction equals 0.2%. On annual basis, the deposit potential reported a marginal growth of 0.6%, whereas the growth of the banks' lending activity slowed down to 9.6%. 

The Council, at its today's session, adopted the Internal Audit Report for the first half of 2009.  In this period, ten audits, nine of which regular and one extraordinary audit, and scheduled activities were conducted related to the monitoring of the given recommendations. The Council has drawn a conclusion that in the first half of 2009, the Internal Audit Plan of Activities was entirely accomplished.

Governor's Office