Dimitar Bogov: Recent financial and economic developments in Macedonia Interview with Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, in The American Times, October 2013. *  *  *  Please offer our readers a brief on the functions of the National Bank of the Republic of Macedonia (NBRM) Our primary goal is price stability with a secondary goal of financial sector stability. Without jeopardizing the primary goal NBRM should support economic policies. The way in which we execute the primary objective is by pegging the exchange rate with the Euro. Pegging our currency has been our long term strategy since 1995, originally with the Deutsche mark. When one compares our inflation with that of the European Monetary Union the result is relative alignment; to put it in real terms, EMU inflation is at about 1.9% with Macedonia hovering at 2.2%. We have witnessed in the past 4–5 years several very important foreign direct investments. Some of them are so large that they already equate to roughly 17% of our exports. How has the global recession and currently, the strength of the Euro, especially when compared to the US dollar effected your ability to maintain price stability, if at all? It affected our economy because our largest export markets are EU countries, equating to 60%, whose demand for our products dramatically reduced.
Exchanges with colleagues from market operations, payment systems and economic analysis will help the supervisors to develop a different viewpoint on current market developments, the importance of a specific institution for payments and the economic environment. One area in which cooperation will be particularly intensive is macro-prudential supervision. Our aim here is to bring together insights from both the macro-prudential and the micro-prudential areas, and to address undesirable developments in a targeted way. Conclusion Ladies and gentlemen, the European supervisory landscape is facing a major change. With the SSM, we have created a strong, new supervisor at the European level. The SSM will be able, and have the responsibility, not to do everything differently, but to do some things better. With the conclusion of the comprehensive assessment, and the publication of the results in the second half of October, and the start of our supervisory activity on 4 November, we have a few stressful months ahead of us. But we must also remember to occasionally pause for a moment and to reflect beyond the immediate tasks at hand. The SSM may have been created as a consequence of, and as a solution to, certain problems in Europe. But it is  BIS central bankers’ speeches  3  destined to be able to achieve much more and – at least that is my hope – to have an effect over and beyond Europe. Thank you for your attention. I am now at your disposal for questions. 4  BIS central bankers’ speeches