The base rate applied to the main short-term monetary policy operations remains at the level of 3.6% annually, as it was set in May. Under the decision taken by the Executive Board of the National Bank of Moldova on November 5, the interest rates on overnight loans are kept at 5.6 percent annually, on repo operations – at 3.85 percent and on overnight deposits – at 1.6 percent annually, IPN reports.
At the same time, the required reserves ratio of funds attracted in Moldovan lei and in non-convertible currency is reduced starting with the period of application of the required reserves in Moldovan lei - November 16 to December 15 - from 29% to 27% of the calculation basis.
The required reserves ratio of funds attracted in freely convertible currency is reduced starting with the period of application of the required reserves in freely convertible currency - November 16, 2024 to December 15, 2024 - from 39% to 36% percent of the calculation basis.
"The respective decision is adopted in the context of continuous dissemination of the effects of former monetary policy decisions, given the delays related to their transmission. By concomitantly reducing the mandatory reserves ratios in Moldovan lei and in freely convertible currency, the NBM aims to decrease lending costs. This will further support the process of lending to the private sector and boost the national economy," reads a press release.
According to the central bank, the cumulative monetary policy stimulus measures to reduce the base rate and the reserve ratios ill increase the excess liquidity in the banking system by the end of this year. The current and forecast volume of liquidity will allow banks to lend to economic agents and households and to also invest in state securities.
Given that the seasonal demand for cash and loans will exceed the forecast made during the current round, the National Bank of Moldova will pour additional volumes of liquidity into the money market by further reducing the required reserves ratios.
