Today the National Bank of the Republic Council held its sixth session at which the latest macroeconomic developments were presented. 

Skopje, 9 June 2011

Press release of the NBRM

Today the National Bank of the Republic Council held its sixth session at which the latest macroeconomic developments were presented. 

The data on inflation show that in May 2011, inflation registered a monthly decline (of 0.2%) for the first time in nine months, which largely reflects the fall in prices of fresh vegetables. On annual basis, inflation was 5.2% and the average inflation rate in the first five months of the year has been 4.5%. These achievements indicate the possibility of achieving an inflation level closer to the lower limit of the projected interval of the NBRM (between 5% and 5.5%) for the second quarter. Core inflation remained stable, and in May it equaled 1.3% on an annual basis, which supports the assessments of temporary and controlled growth of domestic prices and stable inflation expectations. This conclusion is also supported by the realized movements on the currency exchange market, where in the first four months of 2011 a net purchase of foreign currencies was realized, in conditions of continuing reduction of the demand for foreign currency on annual basis.

In terms of economic activity, the latest statistical indicators and indicators based on survey research indicate growth of the economic activity in the first quarter and retaining of the positive dynamics of GDP also during the second quarter of 2011. Indications of stronger domestic demand are confirmed also by the achievements in the external sector, where in the first four months of 2011, strengthening of import demand was noted. Higher exports also acted in this direction (in line with the enhanced foreign demand), which due to the high import component, has led to worsening of the trade balance on annual basis. However, such changes did not generate pressures on the foreign exchange market, which is still characterized by relatively stable movements, suggesting increased capital inflows in this period. The stock of gross foreign exchange reserves totaled Euro 1,883 million as of May 31,2011, and compared to the end of 2010 it was higher by Euro 169 million, largely due to inflows generated on the basis of disbursements from the IMF's precautionary credit line, by the state.

In April 2011, banks continued lending to the private sector, although with somewhat more moderate intensity compared with the previous month, which contributed to a moderate slowdown in the annual growth rate of total loans to a level of 7.8%. Such shifts in the credit market were achieved in conditions of slowing the annual growth rate of total deposit potential from 12.4% in March to 9.6% in April, primarily under the influence of single factors that caused high outflow from the accounts of enterprises in April (dividend payment by a major domestic company), while household deposits have registered moderate acceleration in the annual growth rate.

In order to further align the bylaws with the new Law on the National Bank of the Republic of Macedonia, the Council considered and adopted the Decision on term and outright buying and selling of securities by the National Bank of the Republic of Macedonia, the Rules on the manner and the procedure of trading and settlement of transactions in securities on the OTC markets and the Decision on the Chart of Accounts for banks. The Decision on the Chart of Accounts for banks introduces certain supplements with new accounts in order to ensure more accurate records and improve the supervisory activity of the National Bank of the Republic of Macedonia. New element of the Decision on term and outright buying and selling of securities by the National Bank of the Republic of Macedonia is the introduction of the possibility of making term repo transactions with banks on a bilateral basis, despite the definitive purchase and sale of securities, which increases the flexibility of the National Bank of the Republic of Macedonia in the management of the banking system liquidity.

In order to comply with the new Law on the National Bank, at today's meeting the Council adopted several by-laws related to the internal organization and operation of the Bank. 

Governor's Office