North Macedonia’s central bank cuts key rate by 0.25 pp

By bne IntelliNews January 15, 2020

North Macedonia’s central bank decided on January 15 to cut the key rate to 2% from 2.25%, assessing that there is a space for further easing of monetary policy.

The decision was based on the assessment of the current economic and financial conditions and expected risks.

The last time the central bank lowered its key rate, by 0.25 pp, was on March 13, 2019. The bank uses CB bills to manage liquidity in the banking system. It uses a tender with a limited amount to place the CB bills, where it also announces a fixed interest rate for the bills.

The central bank also sold out MKD25bn (€406.5mn) of 28-day central bank (CB) bills on January 15. In the latest auction the demand for CB bills was equal to the sold amount.

The next auction of CB bills is due to be held on February 12.

The central bank assessed that the economic growth of 3.6% achieved in the first three quarters of 2019, was in line with projections. The bank expects moderate economic growth in the last quarter of 2019.

According to World Bank projections, North Macedonia's economy will grow by 3.1% in 2019 and 3.2% in 2020.

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