Governor of Moldova's national bank says, suspension of of EU assistance first installment not to affect foreign exchange reserves, exchange rate
19:09 | 10.08.2018 Category: Economic
Chisinau, 10 August /MOLDPRES/ – The Governor of the National Bank of Moldova (BNM), Sergiu Cioclea, says in a Moldovan mass media interview that suspension of the first installment of the EU Macrofinancial Assistance Programme will not affect foreign exchange reserves and will not "have a major effect" upon of foreign exchange market.
"The suspension of EU macrofinancial assistance will not affect the level of international reserves in perspectives, which at the end of July reached a record level of almost $3 billion", answered the Governor of BNM. He added that in this situation "it is important to respect the commitments to the International Monetary Fund (IMF) and World Bank (WB). Otherwise, there might suffer the external financing of budget and current account, but also internal agenda of structural and institutional reforms."
Sergiu Cioclea hopes that discord in relations with European bodies will be overcome as soon as possible by intensifying dialogue and identifying remedial solutions.
Regarding an eventual effect on exchange rate, the BNM governor mentioned that the increased level of remittances and good performance of Moldovan exports ensure a significant foreign exchange flow on domestic market despite erosion of trade deficit. The supply of foreign currency by individuals continues to exceed the demand from economic agents, which explains, largely, the trend of appreciation of Moldovan leu (MDL). The foreign currency inflows to individuals reached $1.2 billion in 2017 and rose, up 16 per cent in the first half of 2018.
"As to anticipate the effect of suspending EU Macrofinancial Assistance Agreement, the total disbursement amount is about $116 million over a two – year period. So, in the short term, suspension of macro – financial assistance will not have a major effect upon foreign exchange market," concluded Sergiu Cioclea.
(Reporter V. Bercu, editor L. Alcaza)
