The base rate on the main short-term monetary policy operations was raised by 1 percentage point to 3.65% a year. The interest rate on overnight loans was increased by 1 percentage point to 6.15% annually, while that on overnight deposits to 1.15% annually. The monetary policy decision was adopted by a unanimous vote by the Executive Board of the National Bank of Moldova (NBM), IPN reports.

According to NBM, the updated forecast shows the inflation rate can exceed the upper limit of the variation interval of the inflation target in the pronounced pro-inflationary context of the external environment that is marked by the higher than anticipated recovery rate of the world economy and of the main foreign commercial partners of the Republic of Moldova, alongside the persisting high oil quotations.

At the same time, the inflationist pressure is supported by the internal aggregate demand that is fueled by the recovery of the population’s consumption following the rise in salaries in the economy, the volume of released new loans and of money transfers in favor of private individuals.

In April-May this year, the economic activity improved, rising to the level existing before the pandemic. Compared with May 2019, the industrial production increased by 4.4%, the turnover of retailing enterprises by 24.3%, the turnover in services provided for the population by 40.6%, the imports of goods and services by 13.3%.

The inflation process will be persistent and will not be temporary in character. Therefore, the cooperation of the authorities for synchronizing the macro-economic policies, primarily the fiscal and monetary ones, is imperative.

Inflation report No. 3, 2021, will be published next week. The next meeting centering on the monetary policy will be held on September 3, 2021.