Today, the National Bank of Macedonia Council held its third session.

Skopje, 29 March 2012

Press release of the NBRM

Today, the National Bank of Macedonia Council held its third session. 

At today's session, the National Bank Council adopted the new Decision on the methodology for determining capital adequacy, which prescribes the method of calculating the capital requirement of banks to cover credit risk, operational risk, market risks and currency risk, as well as the method of calculating their own funds.

The calculation of required capital to cover credit risk is based on the so-called standardized approach under Basel II. Under this approach, the required capital to cover credit risk arising from the balance sheet and off-balance sheet receivables of banks is determined on the basis of the credit rating of the debtor or of the receivable, assigned by recognized external institutions to assess credit risk, or on the basis of the credit risk of the country in which the debtor is located. Unlike credit risk, in calculating the capital requirement to cover the currency risk, market risks and operational risk, no significant amendments to the current Decision were made.

Beside these novelties, the new Decision brings certain changes in the method of defining banks' own funds. The changes aim to strengthen the quality of own assets and are part of the activities for the application of capital standards defined by the latest amendments to the Basel Capital Accord (so-called Basel 3).

For the banks, the new Decision will take effect from July 01, 2012, while for the savings houses, the application will start on July 01, 2013.

At the session, the Council also adopted the Decision amending the Decision on the manner and conditions under which residents which are not authorized banks may open and hold accounts abroad. The amendment to the decision will allow residents, legal and natural persons to open and hold accounts in electronic payment transactions services exclusively for commercial purposes, or for buying/selling goods and services electronically.

At the session, the NBRM Council was informed on the latest macroeconomic developments.

Recent macroeconomic trends indicate a relatively favorable environment for the monetary policy. Namely, in February, NBRM continued to purchase foreign exchange on the foreign exchange market, which had a positive effect on the level of foreign reserves. Furthermore, data on inflation show moderate deceleration in the annual inflation rate in February to 2.9%, which is consistent with recent projections of the NBRM for gradual slowdown in the growth of prices during the first quarter. Core inflation is still maintained at a low level, and in the period January to February 2012 it averaged 1.4%.

In line with the expectations, in the fourth quarter economic activity slowed down, with the gross domestic product registering slow annual real growth of 0.2%. For the entire 2011, growth in the economic activity was 3%, which is an acceleration compared to the previous year. Structurally observed, economic growth in 2011 was largely driven by investment and export demand. However, given the pressures on imports, net exports gave negative contribution to growth, as opposed to the positive contribution of domestic demand.

The latest available data on the balance of payments point to current account surplus of 0.2% of GDP in the last quarter of 2011, which is an improvement of the current balance of 2 percentage points of GDP on an annual basis, mainly due to the unusually favorable current transfers in this period. The capital and financial account registered net inflows of 2.7% of GDP, amid realized inflows on the basis of FDI (of Euro 126 million or 1.7% of GDP) and further indebtedness of the government based on the World Bank's Policy Based Guarantee Program for the Republic of Macedonia (of about Euro 130 million). In conditions of narrowing of the trade deficit in January and retention of favorable movements in the currency exchange market during the first two months of 2012, as of February 29, 2012 gross foreign reserves amounted to Euro 2,061.8 million, which is a minimal reduction of Euro 7.1 million compared to the end of the previous year.

Banks' total deposits and total loans in February 2012 were higher by 9.2% and 8.3% respectively on an annual basis, denoting further growth of these aggregates on an annual basis, though at a more moderate pace compared with the previous month.

At today's session, the Council adopted the Report on the Activities of the Internal Audit in 2011 and considered other matters within its jurisdiction.

 Governor's Office