The deepening of the depreciation trends of the national currency witnessed since the start of this year reveals the imminence of pronounced inflationist pressure in the immediate periods, which, at the first stage through the prices of imported goods and the charges of public utilities, and afterward through the extension of the pro-inflationist expectations, will cause the Consumer Price Index to temporarily exceed the upper limit of the variation interval ± 1.5 percentage points from the inflation target of 5%, the National Bank of Moldova says in a communique, quoted by IPN.
According to the central bank, the increasing probability of a recession in the countries of the euro zone and in Russia, which are the main commercial partners of Moldova, can lead to the diminution of the currency incomes of the population and the national exporters in the short term, through the external trade channel and the remittances of the population. This can influence the dynamic of the exchange rate of the national currency and, afterward, the evolution of inflation. The escalation of the geopolitical tension in the region can cause additional inflationist pressure.
In a meeting on February 26, the National Bank’s Administration Board decided to maintain the monetary policy interest rate at the level of 13.5% a year. The given decision is aimed at anchoring the inflationist expectations in a move to maintain the rate of inflation within the target of 5% in the medium term, with a possible deviation of ± 1.5 percentage points.
The central bank will continue to offer the banks liquidity according to the calendar announced for 2015, through REPO operations for a period of 28 days, at a fixed rate equal to the base rate of the National Bank, plus a margin of 0.25 percentage points.
