The Executive Board of the National Bank of Moldova (NBM) on February 7 decided to reduce the base rate applied to the main short-term monetary policy operations to 17%, down from 20% last December. Interest rates on overnight loans and deposits were set at 19% and, respectively, 15% annually, down by 3 percentage points in both of the cases, IPN reports.
“The decision was taken in a move to ensure the continuity of stimulation measures in the context of the series of measures to relax the monetary policy launched at the end of last year given the justified preconditions associated with the continuation of a disinflation macroeconomic framework,” NBM governor Octavian Armașu told a news conference.
According to him, the given decision was influenced by the authenticity of the NBM forecast of October 2022 and by the annual inflation deceleration perspectives under the pronounced disinflation pressure exerted by the internal and external demand. It also goes to a neutral fiscal impulse confirmed by the current forecast.
“According to the current forecast, the annual rate of inflation will follow a rapid downward trend this year and will return to the variation interval of the target in the second quarter of 2024 and will remain there until the end of the forecast period,” noted the governor.
The NBM’s decision is aimed at supporting the balancing of the national economy by creating monetary conditions for stimulating and accelerating aggregate demand and reinvigorating consumption, activating this way the channels of the transmission mechanism, including the lending one.
