The National Bank of the Republic of Macedonia Council discussed several issues related to its operations at its session held today
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 the Semi-Annual Report of the NBRM for the January - June 2006 period and was also informed on the recent macroeconomic developments in the Macedonian economy.
In the January-September 2006 period, the average inflation rate equaled 3.3%. The inflation is due to the higher prices of tobacco and the higher excise and new taxes, the higher prices of food products and the higher prices of fuel and electricity, contributing with 38%, 26% and 18%, respectively. Having the effect of the prices of cigarettes, food and energy exempted, the average inflation equals 1.2%.
The foreign exchange market further registers favorable movements, ensuring an ongoing increase in the gross foreign reserves, reaching Euro 1,370.1 million on September 30, 2006, which is an actual increase of Euro 397.2 million compared to the end of the preceding year. The increase is due to the net purchase of Euro 180.9 million on the foreign exchange market by the NBRM and the inflow from the privatization of ESM distribution. At the last auction of CB bills, the average interest rate equals 5.7%.
The total deposits and total placements of the banks with the private sector keep on registering high annual growth rates. Thus, in September 2006 compared to the same month of the preceding year, the total banks' deposits surged by 24.5%, along with the 24.6% increase in the total banks' placements to the private sector.
The National Bank of the Republic of Macedonia Council adopted the Report on the Banking System and Banking Supervision of the Republic of Macedonia in the first half of 2006, at its today's session, drawing a conclusion that the positive trends in the banking system carried on in the first half of 2006. On June 30, 2006, the total assets of the banks in the Republic of Macedonia reached Denar 149.9 billion, which is a semi-annual increase of 6.7%.
Notwithstanding the enhanced volume of activities of the banks, their overall risk level declined. The credit risk remains dominant in the banks' operations, registering a permanent downtrend. In the first half of 2006, the credit exposure classified in C, D and E risk category reduced by 1 percentage point, making up 9.9% of the overall credit exposure of the banks on June 30, 2006.
The banking system remained stable, illustrated by the relatively high capital adequacy ratio of the banks, which on June 30, 2006 equals 19.6%.
The accelerated activity of the banks was accompanied by the increase in the earnings. As of June 30, 2006, the banking system in the Republic of Macedonia generated a gain in a total amount of Denar 1 billion, which is by 8.9% more compared to June 30, 2005.
The Council also adopted the Report on the operations of the Internal Audit Department in the first half of 2006.