Official reserve assets reach new maximum level in Moldova

Chisinau, 17 November /MOLDPRES/ – The official reserve assets have reached a new historic high of $3 billion 49.8 million, according to data released by the National Bank of Moldova (BNM).

The data of BNM also indicate that official reserve assets grew by over $240 million over the end of 2017. Most of the reserves, namely $1.65 billion, are held in securities and $1 billion 388 million are available and term placements, including foreign banks.

The most recent increases in foreign exchange reserves are due to interventions of BNM in the domestic foreign exchange market in the form of currency purchases, evolution of exchange rate of component currencies against USD, and income from the management of foreign exchange reserves. "The favourable exchange rate developments have allowed the growth of foreign exchange reserves, which currently exceed six months of imports," notes the World Bank.

After the banking crisis in 2014, the reserves fell by about one billion dollars and in October 2015 reached the lowest threshold of $1.74 billion. After stabilising the MDL, rehabilitating the banking system and re – establishing relations with the International Monetary Fund (IMF), entering the foreign ministry on behalf of the Ministry of Finance (MF), the BNM has managed to recover its lost positions and the foreign exchange reserves exceeded the pre – crisis level. The BNM has intervened in the domestic foreign exchange market only as a buyer of foreign currency.

"Due to the increase in foreign exchange reserves, the BNM can continue the relaxation of foreign exchange policies, which are still quite restrictive for both business and population. In other words, Moldova is not in a critical situation regarding the foreign exchange reserves and repressive measures regarding repatriation of the currency do not have an economic justification", considers economist Veaceslav Ionita.

The BNM states that the official reserve assets (identical to gross international reserves) are assets available at any time and controlled by the BNM for the direct financing of the balance of payments imbalance, indirectly adjusting the balance of payments imbalance throughout interventions in the foreign exchange market for the purpose of implementing the monetary and foreign exchange policy of the BNM, as well as for other purposes.

The BNM's data indicate that the official reserve assets have increased by $598 million in 2017, up from an increase of $470 million in 2016.