The base rate applied to the main short-term monetary policy operations will be maintained at the current level of 7.5 percent annually. A unanimous decision in this regard was made by the executive committee of the National Bank of Moldova (BNM) on Wednesday, October 30.

Interest rates on overnight loans and deposits will remain unchanged - 10.5 and 4.5 percent annually. Additionally, the committee decided to keep compulsory reserves norms at current levels of 42.5 percent and 17.0 percent respectively for the calculation basis.

The National Bank said that the forecast on inflation remains accurate, while inflationary pressures will continue until the end of the current year. These will be mainly determined by the aggregate demand, the increase in the unit labour cost and the seasonal effect. The situation will reverse in the first quarter of 2020, when inflation will start to decline.

In September, the annual inflation rate was 6.3 percent. Thus, it has evolved according to the forecast.

According to the BNM, there was a sharp economic growth in the first half of the year, which will continue until the end of the current year at a more modest rate. In the second quarter of 2019, the investments of the population increased in relation to consumption due to income increase.

Additionally, the volume of new loans granted in national currency during the previous quarter amounted to 5.8 billion lei, registering an annual increase of 26.1 percent. The loans were equally distributed to natural and legal entities.

The BNM said that it will continue to monitor and anticipate internal and external macroeconomic developments, the risks and uncertainties associated with the evolution of inflation and will continue to ensure that price stability is maintained in the medium term.

The next monetary policy meeting will be held on December 11, 2019.