North Macedonia’s FX Reserves up 9.6% Y/Y in March

Why It Matters

Higher reserves strengthen the denar’s euro peg and give the NBRM a larger buffer against energy‑price shocks, supporting investor confidence in the Balkans.

Key Takeaways

• Reserves hit €4.249 bn ($4.6 bn), up 9.6% YoY.
• February dip of 5.5% linked to Middle‑East cost pressures.
• Securities comprise 73.7% of reserve portfolio.
• Current‑account deficit projected at 5% of GDP in 2026.
• Denar remains pegged to euro; 60% debt denominated in euros.

Pulse Analysis

North Macedonia’s foreign‑exchange reserves have become a focal point for regional investors after the central bank reported a 9.6% year‑on‑year increase to €4.249 bn (approximately $4.6 bn) in March 2026. The surge follows a February contraction of 5.5%, attributed to heightened business costs stemming from the ongoing Middle‑East conflict. Despite the volatility, the reserve composition remains stable: securities hold 73.7% of the portfolio, monetary gold 16.7%, and the remaining 9.6% split between currencies and deposits. This structure provides liquidity while preserving earnings from high‑yield European bonds.

The broader macro backdrop underscores the significance of the reserve build‑up. The IMF’s latest Article IV assessment highlighted a 3.5% growth rate in 2025, driven by construction and private consumption, yet flagged a widening current‑account deficit that is expected to reach about 5% of GDP in 2026. Elevated energy prices, spurred by the Iran‑related oil shock, and persistent geopolitical risk have pressured the balance of payments, making a robust reserve buffer essential for maintaining the denar’s euro peg, which has been in place since 1997. Around 60% of public debt is euro‑denominated, amplifying the need for foreign‑currency assets.

For investors and policymakers, the reserve expansion signals fiscal resilience and a commitment to external stability in a volatile region. A healthier reserve position reduces the likelihood of abrupt devaluation, supports credit ratings, and can lower borrowing costs for the government. As the Balkans seek deeper integration with EU markets, North Macedonia’s ability to sustain its peg and manage external shocks will be a key determinant of its investment climate and long‑term growth trajectory.