National Bank of the Republic of North Macedonia presents ARIMA-based model to forecast short-term denar cash in circulation

The National Bank of the Republic of North Macedonia held the 55th session of its Researchers’ Club, featuring a scientific paper by Marija Stojkoska on modelling short-term demand for currency in circulation in North Macedonia. The work focuses on improving daily forecasts of cash in circulation, which the central bank highlighted as operationally important for liquidity management and the conduct of monetary policy. The paper frames cash in circulation as a central bank balance-sheet item that directly affects how much domestic-currency liquidity banks need. It develops a time-series forecasting model for daily denar cash in circulation based on an ARIMA approach, drawing on other central banks’ experience and relevant literature; the reported results indicate high short-term forecasting accuracy. The central bank noted that using the model in practice could strengthen banks’ liquidity projections and support more efficient cash-flow management through appropriate calibration of monetary instruments. Researchers’ Club sessions are held four times a year and are supported by open calls for papers, including working versions. The next session is scheduled for December.