Moldovan national bank revises decreasing yearly inflation rate

Chisinau, 27 July /MOLDPRES/ – The National Bank of Moldova (BNM) revised in decrease the annual inflation rate to 6.5 per cent in 2017, compared with 6.8 per cent, as expected in May, and 4.4 per cent in 2018, compared with 5.1 as forecast previously.

"According to the current forecast, the annual inflation rate will continue to record a high level in the third quarter of 2017, after which it will rapidly descend to the lower limit of the target range," said a press release of the BNM. According to the central bank, inflation will return within the range of ± 1.5 percentage points from the 5.0 per cent target in the first quarter of 2018 and remain within the range, mostly in the vicinity of the lower limit. "The average annual inflation rate for 2017 and 2018 will be 6.5 and 4.4 per cent, respectively," notes the BNM.

The National Bank also revised its forecasts on quarterly inflation. The Inflation Report, presented on 04 May 2017, indicated that the annual inflation rate would have an upward tendency and reach the maximum of 8.1 per cent in the last quarter of 2017, after which it will diminish.

The annual inflation rate in June 2017 was 7.3 per cent, down by 0.1 percentage points from May 2017. As expected, it temporarily interrupted the upward trend in the first half of 2017, and still hovers above the upper bandwidth of ± 1.5 percentage points from the 5.0 per cent inflation target, stipulates the NBM.

The Executive Board of the National Bank of Moldova (BNM) decided at its meeting on 26 July to maintain the base rate applied to the main short-term monetary policy operations at the current 8.0 per cent per year. Also, the required reserve ratio from means attracted in Moldovan lei and in non-convertible currencies is maintained at the current level of 40.0 per cent of the calculation base.

(Reporter V. Bercu, editor M. Jantovan)