The Macedonian denar (MKD), split into 100 Deni, is the official currency of the Former Yugoslav Republic of Macedonia. The denar was introduced on April 26, 1992. At the time of its introduction, the currency was equivalent to the Yugoslavia Convertible dinar. On May 5, 1993, the denar was reformed from being an Old denar to a New denar, with one New denar (MKD) being equal to 100 Old denar (MKN).
Currently, the exchange rate regime in the Former Yugoslav Republic of Macedonia (FYROM) is what is referred to as a "managed float." The exchange rate of the denar is established on the basis of supply and demand of foreign exchange markets. The denar exchange rate against the euro serves as a fundamental of the Former Yugoslav Republic of Macedonia (FYROM) monetary policy. Money supply and interest rates are dictated by the exchange rate target, which (as of mid-2005) is set at 61 denars to one euro, and has remained more or less constant at that level. With this exchange rate target, the country's central bank (the National Bank of the Republic of Macedonia) has been maintained a stable denar exchange rate against the euro.
Sovereign Ratings for Macedonia
Macedonia is not rated.
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Political Structure
The emerging democracy of FYROM is governed under the constitution of 1991, which was amended in 2001. The Sobranie is the 120-seat unicameral legislature, whose members are elected for four-year terms by both single-seat constituencies and proportional representation. The executive branch consists of an elected president who is, in turn, aided by a council of ministers and a prime minister. On an administrative basis, the country is divided into 123 municipalities. The National Bank of the Republic of Macedonia is an independent legal entity.
Prominent Figures
The chief of state in Macedonia is President Branko Crvenkovski, who was elected into office on May 12, 2004. The head of government in Macedonia is Prime Minister Vlado Buckovski, who has been in office since December 17, 2004. The Cabinet in Macedonia is a Council of Ministers elected by the majority vote of all the deputies in the Assembly.
Unique Characteristics
Throughout its history, Macedonia has proven to be extremely vulnerable, economically, to regional neighbor conflicts. The period of time during the 1999 Kosovo conflict, for example, demonstrates this vulnerability well. During the 1999 Kosovo conflict, Macedonia took on many of the conflict's spillovers. At the height of the crisis, Macedonia sheltered more than 350,000 Kosovar refugees, straining fiscal accounts and increasing social pressures. Foreign direct investment and per capita foreign direct investment, which was already the lowest in the region, grew worse as investors lost confidence. Together with an unemployment rate of about 33%, the crisis intensified economic adversity. Macedonia, prior to the crisis, had been highly dependent on inputs from, exports to, and transport through the Federal Republic of Yugoslavia. At the height of the crisis, total exports had fallen to about 75% of the 1998 level. During the crisis exports fell 75% and alternate routes increased delivery times and delivery risk that made Macedonia's exports less attractive to purchase.
Key Economic Factors
Economic Overview: When Macedonia gained independence in September 1991, the nation was the least developed of the Yugoslav republics, contributing a meager 5% of the total federal output of goods and services. The breakup of Yugoslavia deprived Macedonia of its key protected markets and large transfer payments from the center. Economic growth was further hindered until 1996, by UN sanctions on the Federal Republic of Yugoslavia (its largest market) as well as a Greek economic embargo. Worker remittances and foreign aid softened the subsequent volatile recovery period; for the last few years, GDP has increased each year, rising by 5% in 2000. Furthermore, the country's reserves were given a boost to $700 million at the turn of the century, due to successful privatization. The economy of Macedonia depends on outside sources for its oil, gas, and modern machinery.
Trade: Macedonia is a small, open economy that has taken an emphasis on international trade, with its total trade-to-GDP ratio at about 79.5%. With conflicts within the region and surrounding areas, Macedonia's foreign trade balance has been in deficit since 1994. Its major trading partners include Serbia, Montenegro, Germany and Greece, and its main exports are steel, textile products, coal, chromium, lead, zinc, nickel, tobacco, lamb, and wine. In March 2003, Macedonia became a full member of the World Trade Organization with one of its most important economic policy goals being to attract foreign investment.
Industries: Macedonia's main industries are: coal, metallic chromium, lead, zinc, ferronickel, textiles, wood products, tobacco, food processing, buses, and steel.
Agricultural Products: The nation's main agricultural products are wheat, grapes, rice, tobacco, corn, millet, cotton, sesame, mulberry leaves, citrus, vegetables; beef, pork, poultry, and mutton.
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