Skopje, 31 October 2023 (MIA) — Since the outbreak of the pandemic, household bank deposits have increased by 20 percent, with citizens' savings accounts reaching an estimated total worth of 40 billion denars, according to National Bank Governor Anita Angelovska Bezhoska in a press release from the central bank marking World Savings Day.

She said domestic banks saw an upward trend in local currency savings that amounted to 48 percent.

"The long-term deposits of households are also growing and are currently at the highest level in the last ten years. The fact that bank deposits are increasing, despite a number of once-in-a-century external shocks, is a confirmation of the great public trust in the banking system," the central banker said, adding that the National Bank had also contributed to this by making efforts to strengthen the banking system's resilience.

Personal savings amounted to 62 percent of citizens' total financial assets in 2022, but the share of investments in alternative financial instruments was also increasing, she said.

"Saving money is undoubtedly one of the key engines of economic growth, and in developing countries, an important driver of income convergence. The higher the domestic savings the higher the investment opportunities," the governor said, noting that higher domestic savings meant a lower need for external borrowing.

Hence, Angelovska Bezhoska noted, domestic saving should not only be encouraged but also channeled through the financial system.

According to her, the National Bank hass rengthened the banking system's resilience amid the economic crisis by increasing capital requirements, and also by introducing, for the first time, a countercyclical capital buffer as well as macroprudential policy measures on credit demand quality.

In addition, the release says, important laws have been adopted, including the Law on Financial Stability and the Law on Bank Resolution, strengthening protection mechanisms aimed at solving the bank's problems without threatening financial stability.

"Citizens have a high level of trust in the banking sector, which is not suprising given that the system is stable, highly capitalized and liquid in a period of several overlapping crises," the release adds. mr/