Macedonia’s central bank says no need for denar devaluation amid uncertainty over referendum

Macedonia’s central bank says no need for denar devaluation amid uncertainty over referendum
By bne IntelliNews September 26, 2018

Macedonia’s central bank said on September 26 that there is no need for a devaluation of the local currency despite the uncertainty ahead of the upcoming name deal referendum.

The reaction came after speculation arose that if the referendum ends in a no vote it will result in inflation and devaluation of the denar.

Macedonia is to hold a referendum on the crucial name deal with Greece on September 30. If voters approve the deal, the country’s name will be changed to North Macedonia, and Macedonia's EU and Nato integration processes will be unlocked.

The opposition is against the deal and many opposition MPs have announced they will boycott the referendum, which creates political uncertainty, even though polls indicate a yes vote is likely. 

“There are no reasons, nor there is any need to open debates about possible devaluation of the denar,” the central bank said in the statement.

According to the central bank, the external position of the economy is extremely strong, and the National Bank is intervening with high net purchase of foreign currencies, which additionally strengthens the foreign reserves which creates room for maintaining the stability of the domestic currency.

Neither the stability of the domestic currency nor the banking system are in danger, the bank said.

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