August 11 (SeeNews) - North Macedonia's central bank decided to keep its policy rate unchanged at the historically lowest level of 1.25%, as it sees the current monetary policy stance as adequate to the current economic and financial conditions, it said on Wednesday.
The previous policy rate cuts, accompanied by the reduced offering of Treasury bills, have contributed to a rise in the liquidity in the banking system and supported the flow of credit to the economy, the central bank said in a statement.
The central bank also decided to offer 10 billion denars ($190.3 million/162.5 million euro) worth of central bank bills at an auction on Wednesday, unchanged in comparison with the amount offered at the last auction held on July 14. The central bank's policy rate is the interest rate on the central bank bills.
Latest data shows that North Macedonia's economic output is recovering after the annual decrease of 1.9% in the first quarter, the central bank noted. In terms of inflation, the average annual increase of consumer prices in the January-July period is 2.5%, slightly above the expected rate.
The central bank said in May it expects North Macedonia's economy to grow by 3.9% in 2021, upholding its October forecast. The central bank raised its end-2021 inflation forecast to 2.2% from previously expected 1.5%, reflecting the rising global prices of primary products, mainly crude oil and food.
North Macedonia's GDP fell by 4.5% in 2020, according to preliminary data by the country's statistical office.
The central bank last cut its policy rate in March, slashing it by 0.25 percentage points.
(1 euro = 61.54 denars)