North Macedonia Central Bank Lowers Interest Rate To 5.55%

(RTTNews) - North Macedonia's central bank cut its key interest rate again in December as policymakers assessed that inflation is moving within the forecast range and the foreign exchange market developments are favorable. The Executive Board decided to lower the interest rate on CB bills by 25 basis points to 5.55 percent following its meeting on December 17, the National Bank of the Republic of North Macedonia announced on its website on Thursday. The rate was reduced for the third policy session in a row.

The board also reduced the deposit facility rate on overnight and 7-day tenures by same volume to 3.95 percent and 4 percent, respectively.

The supply of CB bills at the regular auction remains unchanged at MKD 10 billion, the bank said.

"The Committee assessed that the latest conditions in the economy enable further gradual normalization of the monetary policy setup," the bank said.

"This change in the interest rates means that the vigilant approach in the monetary policy conduct remains, which is conditioned by enduring external risks, as well as domestic factors that affect the aggregate demand," the bank added.

The previous change in the key interest rate was a quarter-point reduction in October. Headline inflation accelerated to 4.3 percent in November from 3.5 percent in October mainly due to higher food prices caused by the base effect. On the other hand, core inflation is slowing.

Inflation is estimated to average 3.5 percent this year, the bank said.

The economy grew 3 percent in the third quarter, roughly in line with the central bank's forecast.