Central bank considers lending to economic entities through banks

The National Bank of Moldova last year lent over 1 billion lei to the commercial banks for on-lending to the real sector of the economy. It is ready to continue lending this year, but the average and long-term loans to economic entities must be provided exclusively by the commercial banks and other financial sector players, the central bank's first deputy governor Marin Molosag said in a roundtable meeting, Info-Prim Neo reports. In December last year, the central bank resumed implementing an older financing instrument – the REPO operations, but they now have a different content. The commercial banks can take out loans from the central bank at an interest rate of 6% for seven days, but can repay them within one year. The central bank's role is not to provide direct support to the real sector of the economy, but to ensure a coherent monetary policy, a stable inflation and macroeconomic situation so that the economic entities could plan their work, the first deputy governor said. Speaking about the situation of the commercial banks, Marin Molosag said the volume of loans decreased by 0.1% in January-February (in 2009, the decrease was 10%), but they cannot yet say that the situation became stable. There are 4 billion lei available in the banking system at present. This money could be used to lend to the private sector, but the banks are cautious as the companies do not present business plans guaranteeing they will not sustain irrecoverable losses, Molosag said.