Skopje, 24 March 2026 (MIA) – Central banks have successfully managed exceptionally difficult circumstances over the past five years. We are now in the final phase of reducing inflation and have created substantial policy space to address future shocks. Yet, with stability still out of reach, continued vigilance is required on multiple fronts, National Bank Governor Trajko Slaveski said at the opening of a high-level conference titled “Central Banking Amid Persistent Global Shifts: Fostering Stability, Innovation and Resilience,” organized with the support of the European Money and Finance Forum – SUERF.

Slaveski emphasized that the theme of this year’s event is highly relevant, noting that at a time when the focus had been on restoring price stability and normalizing policies, new challenges have emerged - heightened trade and geopolitical tensions following the recent escalation of the conflict with Iran and disruptions in the Strait of Hormuz.

“Above all, we must continue assuring the public that central banks remain firmly committed to price stability, despite the complex environment. This is not just a formal commitment, it underpins sustainable growth, financial stability and social cohesion. In an era of intertwined crises, preserving it is both more difficult and more important than ever,” the Governor Slaveski said.

He stressed that stability can only be ensured through strong, independent and accountable institutions; policies must be guided by economic fundamentals rather than short-term political pressures, and an independent and responsible central bank safeguards hard-earned credibility and keeps inflation expectations firmly anchored.

“Recent IMF empirical analyses confirm that in countries where central banks are subject to political interference, real interest rates fall by 1.6 percentage points, exchange rates depreciate by 3.1 percent, and inflation and inflation expectations increase by 1.7 percentage points compared to similar economies without such interference. In short, results are worse when independence is compromised,” Slaveski noted.

National Bank Governor said that monetary policy does not operate in a vacuum and that recent crises have shown how important effective coordination with fiscal policy is. Since 2021, he noted, fiscal policy in the region has generally supported the anti-inflationary stance of monetary policy. Western Balkan countries have implemented rapid post-pandemic fiscal consolidation, with average budget deficits of 2.2 percent over the past five years, while public debt is now below pre-pandemic levels.

“With risks rising again, a consistent and well-coordinated policy mix is essential to preserve price stability, stabilize expectations, and protect the economy. Fiscal support is particularly important, as it sends a strong signal of our shared commitment to macroeconomic resilience in the face of current and future shocks,” Slaveski pointed out.

He added that at the same time, as we face persistent external risks, the financial system is undergoing rapid structural changes. Real-time payments, private digital assets, central bank digital currencies, artificial intelligence and big data analytics are transforming financial intermediation, risk assessment and macroeconomic forecasting, fundamentally reshaping the landscape of central banking.

“These digital innovations can strengthen monetary policy transmission, supervision, payment systems, and financial inclusion. Artificial intelligence, in particular, holds significant potential for improved risk assessment, early warning systems, policymaking, and increased productivity. However, they also bring new vulnerabilities: cyber risks, operational disruptions, data privacy concerns, and unregulated products that may threaten stability if not properly addressed,” Slaveski said.

Slaveski added that the IMF’s Artificial Intelligence Preparedness Index provides a useful benchmark. It shows that Western Balkan countries are above the global average in digital and AI readiness, but below the European average. According to him, this is important as artificial intelligence could have significant macroeconomic implications in the future.

Slaveski emphasized that, as highlighted by the Bank for International Settlements, the key challenge in this era of rapid change is maintaining trust and integrity in the monetary system. He added that stability must remain the guiding principle, innovations should be embraced, but never at the expense of trust or without a solid regulatory framework.

“We live in a time of powerful, opposing forces. On one hand, technological progress and digitalization create a strong positive momentum. On the other hand, geopolitical tensions, protectionism, and strategic rivalry drive fragmentation and conflict, particularly affecting small, open economies. The result is disrupted trade flows, volatile commodity prices, and fluctuating capital movements, posing a threat to economic stability,” Slaveski said.

“To build genuine resilience,” the Governor added, “we must prioritize credible monetary policy, strong and well-capitalized banks, effective macro prudential frameworks and prudent fiscal positions. We also need to invest in technological preparedness,” he noted.

“Central banks have shown they can decisively curb inflation, safeguard financial stability, and uphold public trust even in the toughest conditions. Yet uncertainty is back, and complacency is not an option. As the old sailor’s saying goes: ‘A ship without an anchor is at the mercy of the sea.’ In these turbulent times, our firm commitment to stability is our anchor,” Slaveski said.

He added that in the face of emerging geopolitical shocks, we must firmly adhere to the hard-learned lessons from past crises.

“First, we should not too readily ignore supply-side shocks, especially when they prove to be persistent. Second, we must continue to build strong safeguards to address future disruptions. The challenges are further complicated by the fact that geopolitical turbulence is occurring alongside a comprehensive technological transformation: the rapid digitalization of the financial sector and breakthroughs in artificial intelligence. While these developments offer enormous potential to increase economic capacity, we must also carefully monitor possible unintended consequences,” Slaveski said.

As part of the event, three panel discussions will be held, where governors and senior representatives of central banks and international financial institutions will discuss the key challenges facing central banking amid heightened global uncertainty. Participants will address macroeconomic policies, experiences in dealing with global economic shocks, and the role of economic policies in maintaining financial stability.

Photo: MIA