Public Discussion: Solutions to the crisis following invalidation of Chisinau elections
National Bank Governor Sergiu Cioclea claims that, in the short term, suspension of the macro-funding installment stipulated in the Agreement on EU Macro-Financial Assistance to Moldova, will not generate a major effect on the currency market. The statement was made during an interview with the press, IPN reports.
When asked about potential currency trends, in the context of a suspended first installment, Sergiu Cioclea mentioned that the large volume of remittances and high Moldovan exports ensure an important flow of currency on the local market, in spite of commercial deficit erosion. The volume of currency sold by individuals continues to be greater than that offered by businesses, which generally explains the rising trend of the Moldovan leu. The currency inflow for individuals has reached $1.2 billion in 2017, and is still rising, having increased by 16% in the first half of 2018.
Meanwhile, according to the governor, EU’s suspension of macro-financial support will not affect in the near future the level of international currency reserves, which has reached a record level of almost three billion dollars at the end of July. However, he believes, the tensioning of relations with the EU and other foreign partners is bad news. It could have negative consequences in the medium term, and could lead to a worse perception of Moldova by foreign investors, international creditors, and rating agencies.
Moreover, says Sergiu Cioclea, it is important to fulfill the engagements taken with respect to the International Monetary Fund and the World Bank. Otherwise, external funding on our budget and current account might have to suffer, along with the internal agenda for institutional and structural reforms. Therefore, BNM has expressed its concern regarding the discord in European affairs and its hopes for a speedy solution, through intensified conflict resolution dialogue.
The interview with the governor was conducted based on questions asked by mass media institutions, at the request of BNM.
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