Tuesday, 24 April 2018 | News today: 22

NBRM reduces interest rate to 3,5 percent, sees greater stabilization of the economy

The Macedonian Central Bank (NBRM) held a meeting of its Committee on Operative Monetary Policy, which decided to reduce its main interest rate by 0,25 percent, down to 3,5 percent. In its press release, NBRM informs that the decision was made due to the continued stabilization of economic expectations and the structural liquidity of the banking sector. NBRM sees domestic political risks as reduced but still present, while global risks remain in place.

According to the Central Bank, both areas where the political crisis affected the economy – the foreign currency market and bank deposits, continued the trend of improvement and stabilization. For a sixth month in a row NBRM intervention in the currency market was to purchase foreign currency, and state forex reserves continued to improve, and remained adequately within the safe zone.

NBRM saw a rise in bank deposits, with an increase of 4 percent in December, which is a significant acceleration in the earlier rate of growth. Year on year, deposits grew by 5,7 percent in December, and much of the growth came from greater corporate deposits.

At the foreign currency market, NBRM purchased a total of 182,75 million EUR in the second half of 2016, which is more than the amount it sold at the period of political instability in the second quarter of the year. This brings the 2016 balance to a net gain of 16,65 million EUR. The banking sector remained liquid and the annual growth rate in issued credit lines reached 6,6 percent.

NBRM adds that initial 2016 data analysis show that the budget deficit was reduced compared to 2015, indicating that the period of fiscal consolidation extends into a second yera in a row. Inflation rates remained in the negative zone in domestic consumption, with lower food and energy prices. The base inflation index remained positive, and somewhat lower than expected.