activities, developments of the net foreign assets of banks ) indicate high probability of obtaining lower then expected capital inflows, which is consistent with more of global limitations on external financing. figure 4 dynamics of exports and imports of goods ( annual changes ) iv. presented trends from our economy undoubtfully confirm and justify the additional reaction of the national bank of the republic of macedonia. as i stated, the reaction is towards the further tightening of the monetary policy. the characteristics of our economy and of the monetary strategy deriving from it, whose central objective is maintaining the foreign exchange stability, make the requests for undertaking anticrisis measures similar to those of the developed countries, inappropriate and with no foundation. therefore, we constantly repeat. the devaluation of the denar would cause additional distortions in our economy, because of the following : - the structure of trade of the macedonian economy characterises with high reliance of the export on the import of raw materials and manufacturing supplies, low representation of import goods that could be substituted with domestic products ( machines and other equipment ), weak price ellasticity of certain type of import demand ( especially energy products ), due to which the devaluation of the domestic currency will not reduce the problem of the structural trade deficit ; - on the other hand, the negative implications, that can be seen through the transmission effects of the devaluation of domestic currency on prices, further psychological pressures and the opening up of a new cycle of expectations for an additional depreciation of the value of the currency, will certainly appear and they will represent a potential threat for the price stability ; - additional unfavorable element is the currency mismatch, i. e. the net indebtedness of domestic economy abroad, which clearly implies substantial negative effects from any possible depreciation of the domestic currency. therefore, the reaction of the monetary policy, by increasing the interest rate, is directed towards stabilization of the foreign exchange market, further maintenance of the foreign reserves at adequate level and continuation of the policy of stable foreign exchange rate. obviously, the succesfull maintenance of the external balance imposes the necessity of appropriate and well coordinated measures by all the carriers of the macroeconomic policies. in this regard, the fiscal policy adjustments are important, also to obtain external financing to support the balance of payments. the nbrm, with the decision made today, for interest rate increase on the cb bills, is making an additional step towards reducing the

external imbalance, and for achieving the interim and final objective of the monetary policy, remaining prepared to futher undertake additional measures, if necessary. v. in the end, one more information. today, the council of the national bank of the republic of macedonia held its 3rd session this year. among other issues, on this session, the council has adopted the 2008 annual report of the national bank of the republic of macedonia ; the 2008 annual report on managing foreign reserves ; the 2008 internal audit report. all these documents shall be available on our web site in the following days.