The Executive Board of the National Bank of Moldova (NBM) decided to reduce the base rate applied to the main short-term monetary policy operations to 6%, down from 10%. Interest rates on overnight loans and deposits were set at 8% and, respectively, 5% annually, down by 4 percentage points in both of the cases, IPN reports.

The mandatory reserves attracted in Moldovan lei and in non-convertible currency were kept at 34% of the calculation basis, while the mandatory reserves attracted in freely convertible currency at 45% of the calculation basis.

The NBM said the given decision continues the series of stimulatory measures adopted in the recent past for the purpose of creating the monetary conditions needed to bring inflation down close to the inflation target of 5%, with a possible deviation of ± 1.5 percentage points.

“The decision is designed to support the balancing of the national economy by creating monetary conditions that will reinvigorate lending and the latter will contribute to stimulating aggregate demand. This way, the new macroeconomic information available after the completion of the previous forecast round confirms the validity of the NBM forecast about the evolution of inflation,” says a press release issued by the central bank.

The NBM noted that the risks and uncertainty persist. This way, the tense situation in the region, volatility of prices of energy resources at regional level, the method of adjusting the charges for public utilities fuel uncertainty about the perspective of short and medium-term inflation. The uncertainty related to the agricultural production this year and next year remains relevant. The Bank will further monitor the internal and external macroeconomic situation, the risks and uncertainty over the evolution of inflation in the short and medium terms so as to take opportune monetary policy decisions aimed at ensuring and maintaining the stability of prices.

The next meeting to agree the monetary policy was set for August 9.