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N. Macedonia's c-bank keeps policy rate at 1.25%

N. Macedonia's c-bank keeps policy rate at 1.25% The National Bank of the Republic of Macedonia Licence: Public Domain

SKOPJE (N. Macedonia), September 15 (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 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 ($191.6 million/162 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 August 11. The central bank's policy rate is the interest rate on the central bank bills.

North Macedonia's gross domestic product (GDP) increased by 13.1% on the year in the second quarter of 2021, after falling for four consecutive quarters. The GDP growth is a result of increased domestic demand and a drop in net-exports, as expected, the central bank said.

In terms of inflation, the average annual increase of consumer prices in the January-August period is 2.7%, slightly above the expected rate.

The central bank said in May it expects the country's economy to grow by 3.9% in 2021, keeping its October forecast unchanged. 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, when it slashed it by 0.25 percentage points.

(1 euro = 61.71 denars)

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