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

Skopje, 7 June 2012

Press release of the NBRM 

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

At the today's session, the Council adopted the National Bank's Strategic Plan for the 2013-2015 period, which states the crucial objectives of the Bank. Strategic planning is a process that strengthens the management function of the National Bank. It started in early 2012. The Plan will be launched at the beginning of 2013. The Strategic Plan presents the National Bank's strategic vision for the next three years. It is a fundament for developing the Operating Guidelines and the Plan of Activities for the year ahead. 

As a part of the planned activities, the National Bank Council also adopted the Research Program for the 2013 - 2015 period. The Program defines the basic research areas of interest for the National Bank, including development of one or several projects. The research works planned for the next three years will contribute to the decision-making process and will be used for more successful functioning of the National Bank and timely recognition of future challenges.

At the session, the Council also adopted a Decision on amending the Decision on the manner of conducting supervision and inspection. The amendment to the Decision regulates the procedure, the manner and deadlines for reporting on supervisory findings between the National Bank and the auditing company of the bank. Also, the Decision regulates the procedure for conducting examination and inspection of entities connected with the bank and other entities in the banking group and of the auxiliary services company of the bank. The new decision introduces extraordinary examination, which will ensure gathering, processing and analyzing of data required for the National Bank operations.

The National Bank Council also adopted the Decision on amending the Decision on information security of a bank. The amendments specify systems and functions to be provided if banks use auxiliary services companies for the SWIFT systems.

The amendments to the Decision on accounting and regulatory treatment of foreclosed assets allowed the period of haircut for the banks to be extended by 5 years. The haircut will be in the amount of at least 20% annually, and in case the bank fails to sell them, at the end of the fifth year, it will reduce their accounting value to zero. The first haircut will be made not later than January 1, 2013. As of March 31, 2012, foreclosures accounted for 2.1% of the total assets of the banking system.

The National Bank Council also adopted the Decision on the manner and procedure for reporting on transactions with nonresidents as a part of the National Bank measures to reduce the burden of reporting entities. The Decision requires transfer towards electronic reporting on transactions through accounts abroad and settlement accounts, thus increasing the quality of obtained data, reducing the time necessary for data processing and streamlining the National Bank operations.

At the session, the National Bank Council was also informed on the latest macroeconomic developments. 

The recent macroeconomic developments in the Macedonian economy from monetary aspect are relatively favorable. On the foreign exchange market, notwithstanding the enlargement of trade deficit in April and payment of a large amount of dividend to a foreign shareholder, no significant pressures were registered on the exchange rate. The unfavorable effects of these factors were partially abated by the further growth of net-inflows from currency exchange operations that exceed the projections. In April and May, foreign reserves went down moderately, which is still in line with their pathway projected with the last projection cycle. However, they are still preserved at adequate level, ensuring ample room for offsetting any unfavorable shock. Observing the inflation, after the rise in April, mainly determined by one-off factors, in May, the inflation decelerated and reduced to 2% annually. Such inflation dynamics does not depart significantly from the projections for this period. Short-term economic activity indicators still show absence of inflation pressures created through the demand. Domestic demand indicators show deceleration of both personal and investment demand. Moreover, industrial output data for April indicate annual fall of industrial activity for eight consecutive months, while the other sectors developments are also less favorable relative to previous period. Such signals for anemic economic activity, controlled inflation developments and stable foreign exchange market are in line with the recent changes in the monetary conditions. At the beginning of May, the National Bank decided to reduce the reference interest rate by 25 basis points, to 3.75%, thus supporting the credit activity and the growth of domestic economy. The April data on credit market of the banks show slight increase of financial support of the corporate sector. In April, the annual growth of total credits accelerated and reached 8.5% (from 8% in March), with the corporate sector playing the leading role for the new credit growth. In addition, the banks kept on using more intensively their deposit potential for lending, while credit/deposit ratio increased substantially compared to the last month.         

Notwithstanding the stable monetary policy environment, risks from the uncertainty surrounding the resolution of euro area debt crisis and the effects on the global and domestic economy are still present and additionally pronounced, given the number of speculations for potential scenarios for Greece and the euro area. Hence, there is still a need for prudent monetary policy and permanent monitoring of macroeconomic performances, both domestically and globally.

At its today's session, the Council has also discussed other issues within its competence.  

Governor's Office