##ular data imply higher flexibility for statisticians in responding to urgent and ad - hoc requests of the policy makers. at this point, i would like to pinpoint several examples that clearly demonstrate the value added of data granularity from policy perspective. how can we explain the phenomenon of slow credit growth despite the massive monetary policy accommodation? obviously we need to dive into individual / more granular data to understand the causes of the impaired transmission – is it demand or supply side? in our case, scrutinizing the individual balance sheet pointed to different obstacles for different bis central bankers ’ speeches banks – although in some cases it was the liquidity issue, mostly it was capital constraints in the context of deleveraging, new basel regulation, as well as relatively high level of npls. it raised the question of the effectiveness of monetary policy transmission and factors which hinder it. in this respect, the aggregate data was not informative enough, but micro bank - bybank data were needed to detect constraints in a more proper manner. the scrutinization of the balance sheets of individual banks revealed that the main obstacles varied for different banks. for some of them the limited capital was the main constraining factor for expansion of their activities. given that at that point in time the space for increasing the capital through profit retention or injection of additional capital was limited, the banks were not in a position to expand more, without jeopardizing their capital adequacy ratios. in other banks, the quality of the current credit portfolio and the large amount of npls were obstacle for providing more credit to the economy. for some of the banks, the sources of financing of the credit activity were limited, acting as drag on their credit activity. hence, the exploration of the individual bank data indicated that there are various reasons why the monetary measures do not yield the expected results and that different solutions are relevant for different banks. lending survey has been widely recognized as an important source of relevant data on the credit market. in the midstream of the crisis, in particular, not only central banks, but also some international institutions started to conduct lending surveys to tackle the potential structural rigidities, precluding more rapid credit growth. in the case of macedonia, we are running lending surveys since 2006. ever since these alternative “ soft ” data have been an auxiliary, but at the same time a very important information source allowing us to detect the paths of the demand and supply of credits, the main deter

dimitar bogov : recent financial and economic developments in macedonia interview with mr dimitar bogov, governor of the national bank of the republic of macedonia, in the american times, october 2013. * * * please offer our readers a brief on the functions of the national bank of the republic of macedonia ( nbrm ) our primary goal is price stability with a secondary goal of financial sector stability. without jeopardizing the primary goal nbrm should support economic policies. the way in which we execute the primary objective is by pegging the exchange rate with the euro. pegging our currency has been our long term strategy since 1995, originally with the deutsche mark. when one compares our inflation with that of the european monetary union the result is relative alignment ; to put it in real terms, emu inflation is at about 1. 9 % with macedonia hovering at 2. 2 %. we have witnessed in the past 4 – 5 years several very important foreign direct investments. some of them are so large that they already equate to roughly 17 % of our exports. how has the global recession and currently, the strength of the euro, especially when compared to the us dollar effected your ability to maintain price stability, if at all? it affected our economy because our largest export markets are eu countries, equating to 60 %, whose demand for our products dramatically reduced. when one additionally considers our many exports to neighboring, non - eu countries, but who maintain a euro - centric policy we can see an indirect detrimental effect ; which in turn means roughly 90 % of our exports were hit by the crisis. for example, we experienced a decline in gdp of 1 % in 2009 with a recovery of 3 % in the next two years before declining again by – 0. 4 % in 2012 ; which is reasonably low when compared to other countries in the region. although this does not mean the effects from the euro zone crisis were not harsh, they clearly were ; however, there were compensating policies such as a fiscal stimulus from the government which substantially mitigated the negative impact which is most likely why macedonia had the slowest decline in the region. what were some of those hedging fiscal policies? traditionally, macedonia has had low fiscal deficits, ranging from – 1 % to + 1 %, but during the crisis in 2009 this grew initially to 2. 5 % then to 2. 8 % with our highest in 2012 at 3. 8 %.