North Macedonia Maintains Key Interest Rate at 4%

The National Bank of North Macedonia decided to keep the main interest rate unchanged at 4% to maintain a cautious approach and control inflation. Inflation averaged 4.1% in 2025, slightly above the historical average, so stabilizing prices remains a priority. Global uncertainty, rising commodity prices, and domestic demand still pose risks to future inflation. Economic growth is steady, with GDP growing 3.8% in late 2025 and expected to improve slightly, supported by infrastructure projects and strong bank lending. Foreign exchange reserves reached €5.6 billion, considered sufficient to maintain currency stability. Bank deposits and loans are growing, showing a healthy banking sector. However, external risks such as global trade tensions and geopolitical issues remain.

The National Bank of the Republic of North Macedonia kept its monetary policy stance unchanged at its December 2025 meeting, maintaining a prudent approach amid the need for a more durable stabilization of inflation, strong credit dynamics, and lingering risks from the external environment. At the same time, the central bank began implementing a new operational monetary framework, as previously announced. Under the revised setup, central bank bills will remain the key policy instrument used to signal the monetary policy stance, but their maturity has been shortened to seven days and the interest rate set at 4%. Previously, policymakers used a seven-week tenor with a rate of 5.35%.

The National Bank of North Macedonia maintained its benchmark interest rate at 5.35% for the sixth consecutive meeting in November 2025, stating that the current policy stance remains appropriate given prevailing economic conditions. The central bank emphasized its cautious monetary policy approach, supported by recent adjustments to reserve requirements, tighter macroprudential measures, and steps to mitigate systemic risks. These actions aim to safeguard exchange rate and price stability, while the bank remains prepared to further normalize policy if inflation continues to ease and wage pressures remain subdued. North Macedonia’s annual inflation rate slowed to 4% in September 2025 from 4.4% in the previous month, marking the lowest reading in four months. Meanwhile, the country's GDP grew by 3.4% year-on-year in the second quarter of 2025, the fastest economic expansion in three years.