The National Bank of the Republic of Macedonia (NBRM) Council discussed and adopted information on issues related to its operations, at its today's session.
Press release of the NBRM
The National Bank of the Republic of Macedonia (NBRM) Council discussed and adopted information on issues related to its operations, at its today's session.
Adopting the Annual Report for 2005, the Council ascertained that in 2005, the NBRM maintained the price stability, as its primary legally defined objective, achieving an average annual inflation rate of 0.5%. By maintaining the price stability, and taking into account the considerable annual growth in the total deposits of the private sector of 18.3% and in the banks' credits to the private sector of 20.5%, the NBRM contributed towards the real GDP growth of 4%.
In 2005, the NBRM conducted the monetary policy in more favorable macroeconomic environment, manifested by positive performances in the external sector (the current account deficit reduced from 7.7% to 1.3% of GDP), disciplined fiscal policy (0.2% surplus in the consolidated government budget) and stable banking system. The high inflow of private transfers and the enhanced export activity in 2005 led to high net-purchase of foreign currency from the foreign exchange market and commensurate increase in the gross foreign reserves. The prudential fiscal policy and the favorable movements on the foreign exchange market created prerequisites for substantial decrease in the interest rate on CB bills from 10% to 8.4% at the end of 2005
The Council also discussed the macroeconomic developments in the first quarter of 2006. The average inflation rate in the January - March 2006 period equals 2.7%, in line with the projected growth, determined by the increase in the excise and the additional cigarette duties in January 2006. In January 2006, the current account surplus amounted to Euro 6.4 million, compared to the deficit registered in the same month of the preceding month. The higher inflows from private transfers contributed the most to the current account surplus.
The permanent trend of expanding the banks' deposit base carried on in March 2006. Thus, the annual growth rate of the total deposits equals 19.1% implying further growth in the savings and stronger confidence in the banking sector. The higher deposit base contributed towards maintaining and accelerating the banks' lending activity, and consequently, in March 2006, the total banks' placements to the private sector went up by 21% relative to March 2005. At the end of March 2006, the interest rate on the CB bills auctions equaled 6.4%. The downward trend continued in April, reducing it to 6.17%.
Adopting the Annual Report on Foreign Reserves Management, the Council ascertained that in the foreign reserve management in 2005, the National Bank again adhered to the security, liquidity and profitability principles. As to the security principle, the foreign reserves were placed with central banks of OECD member states, international financial institutions and commercial banks residents of OECD member states. Taking into account the exchange rate policy and the need of timely and regularly settlement of the external liabilities of the Republic of Macedonia, the Euro played an important role in the currency of denomination structure of foreign reserves. Simultaneously, according to the liquidity principle, the immediately available funds, with maturity of up to seven days, dominated the placement structure by maturity. The profitability principle in ensured by maximizing the income from foreign reserve management, considering the placement security and liquidity. In 2005, the net-income from foreign reserve management totaled Euro 15.19 million.
The Council adopted a Decision on regulating the manner of maintaining and the contents of the Single Registry of Account Holders. This decision specifies the data on an account, which are to be submitted to the Single Registry of Account Holders by the institution responsible for conducting payment operations to be allowed to use it for executing payments. This decision also defines the manner of maintaining this registry, which, as specified by law, is maintained at a clearinghouse. To allow the institutions responsible for payment operations to adjust their systems and collect data on already opened accounts, this Decision shall start being applied on October 1, 2006.