North Macedonia’s central bank lowered its key interest rate by 20 bps to 5.35%, which it said was due to inflationary developments, as well as favorable external conditions. Inflation was at 4.4% YoY in December, and is expected to slow towards 3.5% this year. This also follows a 25bp rate cut by the ECB in January, which is relevant given the country’s de facto exchange rate peg. The central bank also said it expects economic growth of 3.3% this year, up from 2.3% in 2024.