Skopje, 27 May 2024 (MIA) – National Bank Governor Anita Angelovska – Bezhoska took part in the conference “Macroeconomic stabilization in small open economies – challenges and lessons,” held in Iceland’s capital Reykjavik, after being invited by the Central Bank of Iceland and Northwestern University, one of the most prestigious universities in the United States. 

Angelovska – Bezhoska was invited to share her experience in successfully maintaining the stability of the foreign exchange course in the Macedonian economy, said the central bank.

“In early transition, much like many other Central, Eastern and South Eastern Europe, we adopted a fixed foreign currency course strategy to tackle hyperinflation, which we are currently implementing. It is in line with the characteristics of our economy, which has high trade openness (160% of the GDP), high dependence of export from import components, high financial openness (185% of the GDP) and a relatively high level of euroisation of the banking system (about 42 percent of the assets are in euros). These characteristics pave a way for high transitional effect from the foreign currency course on prices and financial stability, without any significant effects on the economic growth,” said Angelovska – Bezhoska. 

The governor also touched upon the latest crisis and the challenges arising to maintain this strategy. She also mentioned the pressures on the foreign currency market evident from the start of the pandemic until mid-2022, which required significant intervention by the central bank that reached 15 percent from the foreign currency reserves at a certain point. 

“Active interventions on the foreign currency market were possible thanks to the foreign currency reserves accumulated before the crisis in addition to the support from the international financial institutions during the crisis period. The accumulated reserves reflect the prior precautionary macroeconomic policies and the gradual and adequately distribution of liberalization of the capital account. Tightened monetary policy, the use of a set of macroprudent measures primarily aimed at increasing the resilience of the banking system as well as the measures taken to increase transparency and public communication, that have further strengthened trust into the National Bank, have been of key importance in maintaining stability of the foreign exchange course,” stated Angelovska – Bezhoska.  

Despite the unprecedented shocks, the governor stressed at the event, foreign currency course stability was maintained, and the level of foreign currency reserves at the moment is up by close to 40 percent compared to the pre-crisis period.

Photo: National Bank