The de jure exchange rate arrangement is floating. Under the Law on Foreign Exchange Operations (Article 33), the denarexchangerate is freely determined on the basis of supply and demand in the foreign exchange market. However, the National Bank of the Republic of North Macedonia (NBRNM) participates in the foreign exchange
is lower compared to a case where monetary policy does not pay attention to reserve accumulation and is set through a traditional Taylor rule. Overall, we conclude that it is important that NBRM interest rate policies continue to be driven foremost by the need to preserve confidence in the peg by holding adequate international reserves .
1. Macedonia has a de facto fixed exchange rate regime . Price stability is the primary objective of the NBRM specified by law. The maintenance of denarexchangerate stability serves as an intermediate
This Selected Issues Paper assesses Macedonia’s public debt markets and presents recommendations for their further development. Macedonia’s domestic debt market is in the early stages of development and is small by regional standards. The paper also analyzes the main causes of euroization in Macedonia. It discusses the nature of monetary policy in Macedonia where despite an exchange rate peg owing to imperfect capital mobility, there exists some degree of autonomy in the conduct of monetary policy in the short term.
onward . The fiscal policy of the government is focused on signaling fiscal sustainability and prudence over the medium term and supporting the monetary policy of the NBRM as well as denarexchangerate stability in relation to the euro. Through the Treasury Single Account (TSA), the MOF can monitor, on a continuous basis, the cash balance of the central government, EBFs (since end-2004), and local governments (since mid-2005). Municipalities provide their final accounts to the MOF, which are then consolidated with those of the central government and the EBFs. As
This 2019 Article IV Consultation with Republic of Macedonia discusses that after a protracted political crisis, the economy has entered a period of solid growth and stability. Over the recent years, the authorities have reviewed the reform momentum, with crucial institutional and governance reforms and efforts to make public finances more sustainable and equitable. Growth is expected to accelerate in 2020. Lower taxes and higher pensions and wages?including public sector and minimum wages?are expected to provide a further, albeit one-off, stimulus to consumption. Export and investment growth would remain robust but slow somewhat, reflecting weak growth in trading partners. An ambitious consolidation is needed to rebuild fiscal policy space and re-orient public spending toward investment. Reforms to address key labor market and institutional weaknesses will help lift medium-term growth and speed up income convergence. Although growth has been solid in the past two decades, it has not been enough to substantially narrow North Macedonia’s large income gap with the European Union. In order to accelerate convergence, it is essential to continue reforms to improve the public administration, rule of law, and control of corruption.
This could lead to pressures on the denarexchangerate due to its peg to the euro, leading to outflows of bank deposits and pressures on foreign reserves. Given the high degree of euroization, the exchange rate peg is crucial for the stability of the financial system.
Intensified stress and threat of insolvencies in the Greek banking system.
Prospects for the Greek economy and banking system remain subject to considerable risks.
With a quarter of the system’s total assets, the share of Greek-owned banks is among the
This report summarizes the Observance of Standards and Codes on Fiscal Transparency for the Former Yugoslav Republic of Macedonia. It provides an assessment of fiscal transparency practices in the Former Yugoslav Republic (FYR) of Macedonia in relation to the requirements of the IMF Code of Good Practices on Fiscal Transparency based on discussions with the authorities and other organizations and through a fiscal transparency questionnaire. It also provides recommendations for improving fiscal transparency and information on fiscal risks, contingent liabilities, and tax expenditure.
This 2011 Article IV Consultation highlights that Macedonia is poised to achieve low but positive growth under the baseline scenario of a shallow recession in the euro area. Under a downside scenario, growth would be weaker, and external financing pressures could arise. In the near term, the government would need to reduce expenditure growth to meet the 2012 deficit target. A key longer-term challenge would be to reconcile the competing objectives of higher public investment and increases in pensions and public wages while preserving low public debt and low taxes.