FX market – current domestic and international movements- magazine Economy and Business


author: Jane Nastoski

At the foreign domestic market even further the policy of the stable foreign exchange rates remain stable, in its movement range of EUR/MKD between 61, 47 and 61,72. According to those rates commercial banks can buy Euros with the National Bank of the Republic of Macedonia. In such frames banks are trading between themselves through market defines professional principals. Accordingly the average euro rate is shape according to the listing of the supporter banks that published such listings every working day on the electronic platforms created for inter banking trading. All remain currencies from the exchange rates of the NBRM fluctuate freely in relation to the Macedonian denar and its value depends from international foreign exchange market movements.
Among the participants are companies from the real sector, investments funds, licensed exchange offices, foreign banks, and private subjects. All these subjects are trading with domestic commercial banks that finally create demand – offer policy of the bank foreign currencies. Domestic commercial banks at the other side are trading among themselves through uninfected electronic platforms and on that pattern they can through the efficient and market way to match the deficit and surplus of the foreign currencies that emerge among them.

At this moment the foreign exchange market trend is unaffected and the foreign currencies offer dominates making the euro price low (average rate 61, 49). Turnover remains on its high level although there is decreasing in comparison with the first four months in 2018 (3,000,000,000 EUR in 2018; 2.750.000.000 EUR in 2019). The largest share of the total turnover has the Euro, than the American dollar as following and Swiss franc after the American dollar. In the following period the crucial changes toward current trend is not expected. At the end of the month banks are balancing their positions and that results with additional pressure on the offer side of the foreign currencies. Offer of the foreign currencies on the foreign exchange market will remain on its high level although the period of dividends payment from companies with foreign capital is expected. As result of this event it is expected the trade of the foreign currencies to be in the range of 61, 47 – 61,55. During the summer period even more offers of the foreign currencies is expected and mostly they will be provided from the licensed exchange offices. In this period, when the workers that work in foreign countries are coming home, the activities with the exchange offices emerges and the trading with the other currencies except Euro increases (USD, CHF, GBP, SEK, NOK, DKK) and by that the offer of the foreign currencies on the foreign market rise. This trend is going to be active till the end of the year.

On the international stage, global economy is in its delicate moment. This year it will grow very moderately and slowly, that in return will affect our domestic economy. International monetary fund with the latest decreased estimates for our economy is predicting the economy growth of only 3 % for the current 2019 year. In our small and open economy if the foreign investments decrease, as well if the external (foreign) demand for our products decline, the government authorities won’t be able to resolve that issue. The only thing that the governmental can do is to mitigate this unpopular trend. For that reasons in the following period they should prepare well and with adequate measures to allow better business ambient that will result with improvement of the economy results in the second half of 2019.
In this moment in the European Union the most interesting event is the Brexit issue, as well the trade war among America and China and EU and on which way it will impact the European economy. Even three year pass since the Great Britain on the referendum votes to exit the EU, the parliament still cannot achieve contract for final exit of the Britain from the European Union and still remain the European economy in uncertain position. As the result of the Brexit events, the value of the British pound in the last period note declination in relation with the euro and the American dollar.
Large impact on the global economy will be determined by the development of the events between USA and China, as well of the condition of USA economy. USA more than double has increased the customs of the Chinese products that additionally escalated the trade war between two countries. Import customs of the Chinese products in worth of over 200 billion American dollar has increased from 10 to 25 percents and China announced reciprocal measures.
People’s Bank of China decided to devaluate the rate of the Chinese yuan rate in aim to stimulate the export and decide to introduce augmentation of the customs over 60 billion worth import from USA. The president of the USA Mr. Trump also announced that will launch new custom price for additional 300 billion dollars import from China that is clear manifestation of grievance of slow progress in relation between two countries and the fact that the trade deficit of USA with China despite all efforts continue to increase.
The interest rate of the American dollar remains unchanged of digit of 2, 50 % and the expectations are that there is not going to be changed in the following period. Also the unemployment rate in this moment is on its low level of only 3,585 % and that presents the lowest level in the past 50 years of the American economy.

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