In spite of this, such flows may not be considered as one-time effects, but as flows that are characteristic for the process of transition and which have to be incorporated in the monetary policy conduct. The implications of the capital inflow and appreciation of the domestic currency, as well as the reactions of the macroeconomic policy decision-makers will vary from case to case and will depend on the features of the economy itself. Balance of payments deficits, potential factors that may cause their deepening and the liberalization of the capital flows, obviously pose numerous challenges for the monetary policy, both regarding the monetary strategy and the exchange rate regime and regarding its operational setup. The central banks, as key institutional macroeconomic policy makers, and at the same time institutions that permanently work on strengthening and maintaining of their own credibility, unavoidably should focus on the contemporary challenges of the monetary policy, making attempts for timely comprehension of the possible solutions and repercussions. Having in mind this objective, I am glad that on the today's conference are present distinguished experts, governors and representatives of central banks from a number of countries across the world, as well as high rank officials from important international institutions, whose expertise and experience may contribute to good quality discussions regarding the specified contemporary challenges for the monetary policy.
Consistent macroeconomic policies, confidence in the Denar and increased competition in the banking system had to cause easing of the monetary policy and lower interest rates in the economy. The expectations for maintaining the current direction of the Macedonian economy, the firm stance of the Government of the Republic of Macedonia for continuation and intensification of the structural reforms, the realistic expectations for achieving faster growth and the expectations for setting a date for the Republic of Macedonia to start negotiations for getting the status of a member of the European Union, then, intensification of the process of liberalization of the capital flows in 2008, as well as the larger financial integration of the European capital markets through issuance of Eurobonds, definitely build a foundation of realistic expectations for much higher capital inflows in the forthcoming period. 3  BIS Working Party on Monetary Policy in Central and Eastern Europe, 21-22 February 2005, Sinaia, Romania. 4  Buiter W.H. and Grafe C., "Anchor, Float, or Abandon Ship: Exchange rate regimes for the Accession Countries", European Investment Bank Papers, 7 (2), 2001. 2  BIS Review 100/2006  These expectations are supported also by the positive interest differential and attractiveness of the securities that are listed on the domestic securities market. Under such circumstances, key challenges of the monetary policy, in the context of the capital account liberalization and potential risks for deepening of the current account deficit in the Republic of Macedonia, are the following: 1.