Eurasia Press & News
Macedonia’s National Bank, NBM has raised its benchmark interest rate by two percent in order to preserve the stability of the local currency, the Denar.
The NBM’s head Petar Gosev announced this at a press conference in Skopje on Thursday. He informed that at the next auction, the NBM’s bonds will be issued at nine instead of the previous set seven percent interest rate.
The aim “is to ensure a stabile exchange rate and to maintain the foreign currency reserves at an adequate level,” he said.
This move comes after the government recently started issuing short-term state bonds with higher interest rates of around 9 percent to fill the budget. Observers said that by offering better interest rates the government has undermined NBM’s strongest mechanism for maintaining currency stability.
At the last auction the NBM raised only a small portion of the money required.
The NBM in the last six months spent about €340 million to defend the stability of the Denar.
The state foreign currency reserves during the same period fell from €1.7 to €1.3 million.
