Central bank reduces again base rate on main monetary policy operations

The Administration Board of the National Bank of Moldova decreased the base rate on the main short-term monetary policy operations by 2% - from 6.5% to 4.5% a year, Info-Prim Neo reports, quoting a communiqué from the Bank. Last month, the base rate was reduced by another 2%, while last November – from 10% to 4.5%, which was a record low. Thus, after the Board’s decision is published in the Official Gazette, the interest rate on the overnight loans will be by 2% lower - 7.5%, as against 9.5% earlier, while on the overnight deposits – 1.5% a year, as opposed to 3.5%. The norm of mandatory reserves for banks from the resources attracted in Moldovan lei and in foreign currency remained at the level of 14% of the calculation base. According to the communiqué, the recent developments on the world market, the increased volatility of oil prices, the dynamics of the exchange rate of the national currency and the reduced economic activity and demand in the fourth quarter of 2011 contributed to a slowdown in the inflationist process in Moldova. The annual inflation rate for January was 7%, down 0.8% on the previous month. The Administration Boar’s decision is aimed at preventing the disinflation process and at stimulating the internal demand. The decrease in the base rate will gradually lead to lower interest rates on loans.