The National Bank of the Republic of Macedonia Council held its tenth session today
Skopje, 29 July 2010
Press release of the NBRM
The National Bank of the Republic of Macedonia Council held its tenth session today.
The Council discussed the Financial Stability Report in the Republic of Macedonia in 2009, asserting that the financial stability in 2009 has been maintained.
The stability of the financial system of the Republic of Macedonia mostly depends on the stability of the banking system as its dominant segment. The world economic crisis did not affect the banking system directly, but the negative effects were felt indirectly through the domestic real sector. The recession tendencies in the world economy, as well as the deceleration in the domestic growth, had negative reflection on the enterprises' financial capacity, their liquidity and capability for regular servicing of the liabilities. This resulted in enhancement of the financial stability risks arising from the corporate sector, leading to worsening of the banks' credit portfolio quality and consequently, to deterioration of their profitability. The macro prudent measures undertaken by the National Bank created preconditions that will enable banks to cope with higher risks arising from the recession movements in 2009, and to endure the slow pace of the economy's recovery in 2010.
The large presence of the currency component in the enterprises and households' debt distinguishes the Denar foreign exchange rate stability as the main factor for their capability for debt servicing, i.e. the main pillar the country's financial stability founds on.
The other segments of the financial system have moderate influence on the total financial stability in the Republic of Macedonia, because in comparison with the banks they still have smaller funds.
In the forthcoming period, the main risks to the financial stability refer to the recovery pace of our main trading partners and the public debt stock with these economies. The possibility that the smaller turnover and the lower liquidity of the domestic economic entities will spill over on the labour market is of especial importance, which can cause further rise in the risks to the banking system. Having in mind the potential channels for spill over of the negative effects between individual segments in the Macedonian economy, including the financial system as a whole, the maintenance of the macroeconomic stability is key precondition for preserving the financial stability.
The National Bank Council adopted also the Decision on amending the Decision on issuing licences and consent for performing fast money transfer services and terms and conditions for conclusion of a contract between fast money transfer provider and subagent, thus harmonizing the bylaws with the Law on Performing Fast Money Transfer, as well as the Decision on the manner of establishment and application of the banks' programme for prevention of money laundering and financing terrorism, thus harmonizing the bylaws with the Law on Prevention of Money Laundering and Other Proceeds of Crime and Financing of Terrorism.
Governer's office