The National Bank of the Republic of Macedonia Council held its third session today

Skopje, 31 March 2011

Press release of the NBRM

The National Bank of the Republic of Macedonia Council held its third session today.

At the session, the NBRM Council was informed on the latest macroeconomic movements. The data on the inflation point to further moderate increase in the general level of consumer prices, mainly due to the increase in the food and energy prices on the international stock exchanges. Thus the average inflation rate in January - February 2010 period equals 3.6%, given the annual inflation in February of 3.9%. The inflation movements during the year so far, together with the expectations about the movements of the inflation determinants on a short run, show that the inflation rate will exceed the projected level for 2011 in the January projection. However, despite the total inflation growth, the key inflation rate in the last four quarters is relatively stable and in February it equals 1%, annually, which points to the so-far controlled price growth in the domestic economy. 

The previous statement can be verified with the stable movements on the foreign exchange market. Namely, despite the considerable deterioration in trade balance observed on annual basis, in the first two months of 2011, NBRM realized small net purchase of foreign exchange. This corresponds to the performances on the currency exchange market, where in the first two months of 2011, the net purchase continued to mount moderately on annual basis by 3.5%. At the end of February, the gross foreign reserves amounted Euro 1,702 million and it registered slight decrease of Euro 12 million on December 31,2010, which is due to the effect of both the exchange rate differentials and changes in the gold prices. However, the performances still indicate improved total position of the balance of payments than expected. Namely, opposite to the estimates in the January projection for the decrease in the foreign reserves in the first quarter, the data indicate their almost unchanged level, except to the effect of the exchange rate differentials and changes in the gold prices.

In the first two months of 2011, the physical volume of the industrial output registered annual increase of 8.5%, which is continuation of the favorable tendencies in the last quarter of the preceding year, when the highest quarterly real growth of GDP was registered. However, having in mind the low comparison base of the first quarter of the previous year, the registered movements in the economy's real sector should be interpreted carefully.

The movements in the banking sector point to maintenance of the growth rates of the total deposits and the total banks' deposits with the private sector. In February 2011, the total deposit potential mounted by 13.2% annually, given intensified increase with the Denar deposits. On the credit market, after the last month credit activity stagnation, in February 2011 the banks' total credits once again registered solid monthly growth. However, the annual growth rate of the total credits in February equaled 7.2% and it is almost equal to that registered at the end of 2010.

At the Council session held today, several decisions were also adopted. The new Decision on the risk management was adopted as a result of the perceptions of a need of improvement and clarification of certain provisions stipulated in the previous Decision which dates from 2007, in order to enable its uniform understanding and application. Additionally, the new Decision introduces a definition of "use of outsourcing" (thus eliminating the misunderstandings with regard to the scope of this term and the obligations the banks should meet pursuant to the Decision); precisely determine the elements of the process of internal identification and assessment of bank capital adequacy; defines the scope of the bank notification system; it introduces a requirement for the bank to establish standards for physical security of the employees, the clients and its property. 

Four of the adopted decisions were from the area of consumer protection in case of consumer loans. These decisions did not provide more considerable qualitative change of the so far regulations, but it reconciled with the amendments to the Law on Consumer Protection In Case of Consumer Loans from February 2011. For that purpose, the contents of the reports on the annual rate of the total costs that the banks and the savings houses submit to NBRM improved, introducing also a requirement for semi-annual reporting on the number of concluded loan agreements during the reported six-month period.

The Decision on amending the Decision on the manner and the terms under which the residents may collect and pay in cash foreign currency in transactions with non-residents regulates the payment of cash foreign currency in two cases: for business trips and for meeting the requirements on the basis of organizing game of change in casinos. Also, the residents performing transport is free of the obligation to submit to the bank a translation of the international bill of lading - Form CMR when paying the cash foreign currency for the performed services.

Part of the adopted decisions was harmonized with the new Law on the National Bank of the Republic of Macedonia. Namely, Article 126 of the National Bank Council prescribes adoption of bylaws within nine months from the day of the enforcement of the Law. The National Bank Council adopted the following decisions: Decision on issuing, trading and payment of CB bills, Decision on the available overnight credit, Decision on the intraday credit, Decision on the foreign currency deposit with the National Bank of the Republic of Macedonia, Decision on the reference interest rate for calculating the penalty interest rate, Decision on revocation of the Decision on the interest rates of the National Bank of the Republic of Macedonia and Decision on revocation of the Decision on the submission of data of the banks' Denar cash. 

The National Bank Council adopted the Decision on determining the procedure for detection and withdrawal of counterfeited money, which defines precisely all activities related to the procedures with the counterfeited money in the process of their identification and withdrawal, and towards prevention of emergence and further spreading of the counterfeits. Simultaneously, the adoption of this Decision is a step forward towards approaching and harmonization of the national with the European legislation within the domain of prevention of occurrence of counterfeits and protection of Euro and other foreign currencies from counterfeiting.

Governor's Office