The Executive Board of the National Bank of Moldova (NBM), in an extraordinary meeting on April 5, decided by a unanimous vote to maintain the values of the main monetary policy instruments. This way, the core rate applied to the main short-term monetary policy operations remained 2.65 percent annually, IPN reports.

Interest rates on overnight loans and deposits also remained unchanged: 5.15 percent and 0.15 percent annually, respectively.

At the same time, the required reserves ratio from funds attracted in Moldovan lei and in non-convertible currency were decreased by 2.0 percentage points to 28.0 percent of the calculation base, while the required reserves ratio from financial means attracted in freely convertible currency remains at the current level of 30.0 percent of the calculation base.

The decision continues the NBM’s series of measures aimed at mitigating the impact of the pandemic and supports the recovery of the economy by boosting aggregate demand. The NBM also supports the upward trend in lending activity, ensuring sufficient adequate liquidity for this purpose, while reducing lending costs in support of the business environment. The support is also needed to avoid the “crowding out” effect along with the increase in demand for funding from the Ministry of Finance.

This decision was based on the analysis and evaluation of information associated with excessive liquidity in the banking system. Thus, after that the required reserves ratio from funds attracted in Moldovan lei and non-convertible currency decreased by 2 percentage points last month, the level of liquidity increased to 7.1 billion lei on  March 16 this year, but later it continuously decreased to 3.4 billion lei today. This decrease was due, in particular, to the payment of taxes to the state by economic agents.

The next meeting on monetary policy of the NBM Executive Board will take place on April 30, 2021.