NHS Borders is making "significant progress" according to Health and Sport Secretary Shona Robison.
In a letter to John Raine, the chairman of NHS Borders, the cabinet member praised the work being carried out by the board.
Ms Robison wrote: "It is clear NHS Borders is making significant progress in taking forward a challenging agenda on a number of fronts.
"I am confident you are not complacent and you recognise that there remains much to do.
"Clearly overall economic conditions mean that public sector budgets will continue to be tight whilst demand for health services will continue to grow.
"Nonetheless, you confirmed that the Board continues to actively monitor the achievement of all efficiency programmes and, whilst the position is challenging, NHS Borders remains fully committed to meeting its financial responsibilities in 2016/17 and beyond."
NHS Borders chairman Mr Raine added: "The Cabinet Secretary's response has been welcomed by the Board.
"It recognises the efforts of our NHS staff and must give confidence to Borders people."
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