Skopje, 28 January 2023 (MIA) – The denar remains stable, and no pressure is expected in the coming period on the foreign exchange reserves. The health of the banking system is preserved, with capitalization adequate and stable, while non-performing loans remain at a low level, notes a report of the Standard & Poor’s (S&P) Credit Rating Agency, which reaffirms North Macedonia’s credit rating at BB- with a stable outlook.  

The agency points to favorable trends in foreign exchange reserves, which reached EUR 3.9 billion at the end of 2022. According to S&P, energy prices have stabilized in the past months the, so no significant pressure is expected on the foreign exchange reserves.   

In addition, according to the agency’s expectations, reserves will continue to grow with an expected narrowing of the current account deficit and financial inflows through direct investments and certain debt flows. The exchange rate remains stable, and changes in the exchange rate of the denar are not expected.  

The S&P report on the country’s credit rating notes that unlike other countries in the region, the connections of the financial sector of the domestic economy with Russia are small, which means that there are no direct negative transfer effects for the domestic banking system from the crisis. Regarding the banking sector, the agency highlights its stability amid non-performing loans remaining low, at a level of 3.2 percent, while the capitalization rate of the banking sector is adequate and stable and amounts to 17.7 percent.  

S&P notes measures taken by the National Bank in terms of liquidity, changes in the interest policy and in the mandatory reserve, as well as macroprudential measures. The report highlights their role in stabilizing inflation and inflationary expectations, supporting the process of denarization of the economy, as well as further strengthening the resilience of the banking system.