The first years of monetary independence were years of hyperinflation, recession, insufficient foreign reserves, permanent depreciation of domestic currency and general macroeconomic instability. I would like to mention, as an illustration, that just after the monetary independence, the exchange rate depreciated almost on a daily basis, which along with the high monetary and fiscal expansion led to hyperinflation. In 1993, for instance, the average inflation reached nearly 350%, which was devastating for the economy. With the joint efforts of policy makers and scientists, policies for managing the exchange rate volatility as well as inflationary spiral were quickly adopted, which together with the support of the international financial institutions enabled the economy to stabilize and market principals to function. In October 1995, a monetary strategy of stable exchange rate of the denar against the Deutsche mark was adopted and against the euro since January 2002 – a strategy that then as well as now is considered to have been one of the supporting pillars of the stability of the Macedonian economy. Today, after 28 years of monetary independence, it is my pleasure to note that the National Bank is an institution whose credibility and integrity are being permanently reaffirmed. Maintaining price stability is the ultimate objective of the National Bank’s monetary policy.
Without it, we cannot imagine to successfully cope with the challenges ahead of us, especially now, when the European integration is becoming more realistic, which means intensive preparations for the future monetary integration. All of this requires an unconditional consistency in the price stability and the exchange rate of the domestic currency, a supervisory setup that is close to the European one, as well as institutional capacity for a quality dialogue with the European monetary authority. In the end, on behalf of the central bank team and on my behalf, I would like to thank and pay a tribute to the previous governors and managements and to all those who have been part of the central bank in the years behind, the ones that selflessly dedicated themselves and managed to build an institution that is independent, transparent, highly professional and respected in the international community. I would also like to thank the professionals who are a part of our team today – they are the foundation of the values that we constantly build, following the only path to our European future. Even today, 28 years after the monetary independence, we stand firm ahead of new challenges and I assure you that we will succeed by guaranteeing the stability of the denar and price stability, which are the best contributions that a central bank can make for the prosperity of our society. Congratulations on the 28th anniversary of the monetary independence! 2/2  BIS central bankers' speeches