Moldovan National Bank lowers base rate to 8 per cent after seven consecutive months keeping at 9 per cent

19:36 | 28.06.2017 Category: Economic

Chisinau, 28 June /MOLDPRES/ – The Executive Board of the National Bank of Moldova (BNM) decided to reduce the base rate applied to the main short-term monetary policy operations to 8.0 per cent annually after seven consecutive months kept it at the level of 9.0 per cent today. The last-mentioned change in the rate was in October 2016, after a one-year decrease from 19.5 per cent to 9.0 per cent.

Also, the BNM maintained the required reserve ratio of attracted funds in Moldovan lei (MDL) and in non-convertible currencies at the current level of 40.0 per cent of the calculation base.

The Central Bank states that based on the decision of the Executive Committee “the dynamics of the macroeconomic indicators in the recent 2-3 months have been shaped by economic activity moderation and a reduction in medium-term inflationary pressures. Similarly, there are observed moderate over-appreciation indices in real terms of the national currency. This decision aims at creating real monetary conditions capable of reversing inflation within the range of ± 1.5 percentage points from the medium-term inflation target of 5.0 per cent, as well as stimulating aggregate demand.”

The annual inflation rate in May 2017 stood above the upper bandwidth of ± 1.5 percentage points from the inflation target of 5.0 per cent. This was 7.4 per cent, being 0.8 percentage points higher than in April, according to data from the National Bureau of Statistics.

The evolution of inflation in May 2017 was in line with the latest NBM forecast. Thus, early inflation accelerated due to short-term shocks accompanied by the increase in household disposable income. According to the National Bank's forecast, the annual inflation rate will have an upward trajectory until the fourth quarter of 2017, when it reaches the maximum of 8.1 per cent after which it will diminish and will reach the minimum value of 4.1 per cent in the last quarter of 2018.

(Reporter V. Bercu, editor L. Alcaza)

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