National Bank Keeps Its Rate at 4.25 Percent With Inflation at 2.7 Percent and Projects 3.8 Percent Growth for 2026
Foreign reserves are €5.024 billion and loans are growing about 12.8 percent. What keeping the rate means for loans and what has not been explained.
On November 3 the Executive Board of the National Bank kept the key interest rate at 4.25 percent. The decision was carried by several outlets, and the details are on the institution’s website. The decision comes after the data that inflation in September was 2.7 percent year on year.
The figures from the statement. The projection for GDP growth in 2026 is 3.8 percent and for inflation 3.6 percent. Foreign reserves at the end of September were €5.024 billion, and loans are expected to grow by 12.8 percent by the end of the year. The reserves, converted at 61.5 denars per euro, are about 309 billion denars (our calculation).
Rate versus inflation. If we subtract inflation of 2.7 percent from the key rate of 4.25 percent, we get a difference of about 1.55 percentage points (our calculation). That is a rough measure of how “tight” policy is, not an official indicator. But this is exactly where the question arises of why the rate was not cut when inflation slowed.
Why it is not cut. The reports we checked contain no detailed explanation. One possible explanation is the projection itself: the National Bank expects inflation of 3.6 percent, which is higher than the latest figure of 2.7 percent. When a central bank expects prices to accelerate, it usually does not hurry to cut. That is our interpretation, not a statement by the institution.
Context. The European Central Bank keeps its rate at 2.5 percent, which means the domestic rate is 1.75 percentage points higher. The Macedonian denar is in practice pegged to the euro, so domestic interest rate policy largely follows what happens in the euro area and on the foreign exchange market.
What it means for loans. Interest rates on housing loans and corporate loans are set by banks, and the key rate is only one of the factors. A rate that stays unchanged means that cheaper financing should not be expected from this decision. Loans, however, are growing about 12.8 percent, which shows that demand has not stopped.
The risks. One uncertainty is energy prices (our observation, not a statement by the bank). If oil and fuels keep moving up, the inflation projection of 3.6 percent could prove lower than the real figure. Conversely, if energy prices fall, room for a cut would open.
What is unclear. We do not know exactly how the board members voted, how much the projections have changed compared with the previous ones, or what the expectations for the next six months are. The next decision of the Executive Board will show whether keeping the rate is a pause or a stance.
MKNews Hub · Macedonia · November 4, 2026
