NBRM: The banking system showed relatively high resistance to external shocks
High inflation, which is one of the key issues as well as the challenges that policy makers have been facing for a long period of time, in the conditions of a prolonged global crisis, were the main topics on which the emphasis fell at the meeting of the NBRM delegations led by Governor Anita Angelovska - Bežovska and the delegation of the central bank of Montenegro led by the governor Radoje Žugić, which took place at the end of the previous month, that is, in the period from June 29-30.
The conclusion of both teams is that the price pressures, especially for small and open economies, are a consequence of the global problems arising from the pandemic, and related to supply chains, in conditions of opening of economies and normalization of demand. Great pressures are also felt through the channel of ever higher energy and food prices on the world stock markets. These pressures are further emphasized by the crisis in Ukraine. Given the long duration of these developments, the need to act through macroeconomic policies was seen in order to mitigate price growth and prevent the growth of long-term inflationary expectations.
Both delegations agree that in both countries the banking systems show solid performance and relatively high resistance to external shocks in the past period.
The high solvency, liquidity of the banks, as well as the good quality of the credit portfolio show that the banks successfully pass the test of the prolonged crisis, with good starting positions before the beginning of the crisis, sound policies and prudent regulation. However, taking into account the prolonged nature and strength of the crisis, adverse effects on the real economy and transferable effects on banks' balance sheets are possible, which is why careful monitoring, sound risk management and further building of capital positions to deal with potential risks are necessary.
Opportunities and areas where the two central banks can deepen their successful, long-standing cooperation were discussed at the meetings.