National Bank increases norm of compulsory reserves in Moldovan lei, in conditions of excess of liquidities
19:21 | 05.09.2018 Category: Economic
Chisinau, 05 September /MOLDPRES/ – The Executive Committee of the National Bank of Moldova (BNM) has decided to increase the required reserve ratio of funds attracted by banks in MDL and non – convertible currency by 2.5 percentage points up to 42.5 per cent of calculation base "for sterilisation of excess liquidity".
The norm was increased for the period of application of the required reserves in MDL: 16 September – 15 October 2018. Also, the required reserves ratio of attracted funds in freely convertible currency remained at the current level of 14.0 per cent of calculation base.
Even if some of the banks' funds will be "immobilised" as a result of the increase in reserve requirement, the "banks' activity will not be affected. It is rather a precautionary measure in case of a situation of aging in the money market," told director of Programne: The financial – banking sector, at Independent Analytical Centre Expret – Grup, Sergiu Gaibu.
According to expert, "there is an enormous excess of liquidity and the banks will not validate lending projects in a volume capable of ensuring the absorption of these liquidities", as a result of the decision of BNM is quite justified.
In Inflation Report №03, BNM notes that "excessive liquidity in banking system has moderated softly during the second quarter of 2018 and constituted MDL 09 billion 241 million". Similarly, this level of liquidity "under terms of balanced management of monetary and macroeconomic policies has the potential to contribute to economy growth – mainly by granting loans at competitive rates."
The balance of gross loans portfolio amounted to 41.1 per cent of total assets at the end of the first semester, or MDL 33.1 billion, decreasing by 1.0 per cent (MDL 327 million) during the first six months of 2018. On the other hand, the volume of new loans extended by 11.6 per cent compared to similar period of 2017, one of the factors being the decrease of the interest rate on loans.
The mandatory reserves are available from banks, in Moldovan and foreign currency, held in accounts with BNM. The reserves are an ancillary instrument of monetary policy aimed at curbing excess liquidity and mitigating its impact on interbank interest rates.
(Reporter V. Bercu, editor L. Alcaza)
