Effects of the application of targeting the exchange rate policy in Macedonia

Nikoloski, Krume and Paceskoski, Vlatko and Panova, Sanja (2016) Effects of the application of targeting the exchange rate policy in Macedonia. Annals of the „Constantin Brânc uşi” University of Târgu Jiu, Economy Series, Issue 1/2016. ISSN 1844-7015

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The monetary system and monetary – credit policy in the Republic of Macedonia were built after the country gained independence from the previous federal community, when Macedonia faced problems such as: termination of many plants, increase in unemployment, increase in budget and foreign trade deficit as well as high inflation rate. The macroeconomic stability narrowly understood as reducing the inflation rate, was the first measure of the economic policy, undertaken along with the monetary independence of Macedonia.
In a small and open economy, the exchange rate policy has particular importance in the control of the inflation rate and beyond: in the real economic trends. The strategy of targeting the denar exchange rate was accepted and applied with the expectation that it would act in that direction, hence the monetary policy was focused on maintaining fixed exchange rate against the euro. The determination of the country to join the European Union and to become a member of other international financial organizations is yet another reason for choosing this strategy.
Keywords: macroeconomic stabilization, inflation rate, exchange rate of the denar, foreign exchange market, economic growth.

Item Type: Article
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Economics
Depositing User: Vlatko Paceskoski
Date Deposited: 07 Jul 2016 10:44
Last Modified: 07 Jul 2016 10:44
URI: https://eprints.ugd.edu.mk/id/eprint/15978

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