North Macedonia reshuffles reserve requirements

North Macedonian banks will have to boost their reserves following a central bank decision from August 20.

The National Bank of North Macedonia increased the rate of mandatory reserves on foreign currency liabilities with tenors of less than two years from 21% to 22% and doubled the rate for those above the two-year threshold from 5% to 10%.

The new thresholds will become mandatory from November 2025, the central bank said.

It also increased euro-denominated mandatory reserve requirements from 85% to 90% and the reserve requirements of denar liabilities from 8% to 9% “to support long-term denar savings and further increase the stability of the banks’ deposit base”.

Sub-two-year denar deposit requirements were also changed from 0% to 9% to “normalise” the reserve requirement rate, but banks will have fourteen months to meet this prescription, the central bank added.

The central bank said it expects the move to help with monetary policy transmission along with increasing the attractiveness of long-term savings in local currency.

World Bank data shows that North Macedonians are increasingly warming to the idea of saving money at financial institutions: in 2011, a mere 7.8% of respondents said that they had savings in banks, but by 2024, the figure had increased to 32.4%. The share of those who said they had “saved any money” in a year also increased from 35.8% in 2017 to 46.8% in 2024.