North Macedonian Banks to Increase Reserves Following Central Bank Decision
In a significant move that aims to strengthen the financial stability of the banking sector, North Macedonia’s central bank has decided to increase the mandatory reserve requirements for banks. This decision, announced on August 20, is expected to necessitate banks in North Macedonia to enhance their reserves.
New Reserve Rates Outlined
The National Bank of North Macedonia has outlined the new rates for mandatory reserves on foreign currency liabilities. For tenors of less than two years, the rate has been raised from 21% to 22%. More significantly, for liabilities with tenors exceeding two years, the rate has been doubled from 5% to 10%. These changes are a part of the central bank’s strategy to ensure financial stability and reduce risk in the banking sector.
Increased Euro-Denominated Mandatory Reserve Requirements
In addition to the changes in reserve requirements for foreign currency liabilities, the central bank has also increased the euro-denominated mandatory reserve requirements from 85%. This move is perceived as a significant step towards boosting the resilience of the banking sector against economic shocks and ensuring its long-term stability.
Effective Date for New Thresholds
The new thresholds, as per the central bank’s announcement, will become mandatory from November 2025. This timeframe provides banks with an ample period to adjust their financial strategies and operations to meet the new requirements. As the North Macedonian banking sector braces for this change, it is expected to yield a stronger financial infrastructure that is more capable of withstanding economic challenges.
Implications for North Macedonian Banks
The decision to increase reserve requirements indicates a strategic move by the National Bank of North Macedonia towards reinforcing the financial stability of the country’s banking sector. By adhering to these new thresholds, banks will be better equipped to manage potential risks and financial crises, thereby ensuring the safety of customers’ investments and maintaining public trust in the banking system.
Conclusion
Given the increasing global financial volatility, the National Bank of North Macedonia’s decision to bolster reserve requirements is a proactive measure to enhance the resilience and stability of its banking sector. By November 2025, when these new thresholds become mandatory, North Macedonian banks are expected to have stronger financial buffers in place, better equipping them to navigate any economic uncertainties that may arise in the future.
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