The recent upward trends in the exchange rate of the national currency against the main foreign currencies is due to the surplus of currency on the market, the National Bank of Moldova (NBM) says in a press release, quoted by IPN.
On May 15, 2017, the exchange rate of the Moldovan leu against the U.S. dollar and euro was by about 6.54% and, respectively, 2.78% higher than at the start of the year. The recent appreciation of the national currency was fueled by the surplus of currency on the market as the supply of currency on the part of the population and exporters was higher than the demand and necessities of importers.
Thus, during the first three months, the cash transfers to private individuals rose by about 12.65% (US$251.77 million) compared with the corresponding period last year. Also, the growth rate of exports in 2016 exceeded the growth rate of imports. If we take into account the geographical reorientation of exports to the EU and their currency structure, it is evident that the share of the euro has increased in foreign trade. It should be noted that the appreciation of the Moldovan leu against the euro was lower in value than the appreciation against the U.S. dollar, which depreciated also against other regional currencies, such as the Romanian leu and Russian rubble.
Given the excessive liquidity in the banking sector and the high level of foreign exchange reserves, the monetary policy of the NBM does not envision for now the integral purchase of the excess of currency on the domestic market. The National Bank will continue to concentrate on its fundamental objective – to set internal prices according to its inflation targeting strategy. At the same time, the central bank permanently monitors the developments on the internal currency market and intervenes when necessary so as not to allow an excessive volatility of the exchange rate and a speculative evolution of this, it is said in the NBM’s press release.
