The National Bank of Moldova decided to raise the key rate on the main short-term monetary policy operations by 3 points, to 15.5% annually, in its latest attempt to contain inflation. Interest rates on overnight loans and deposits have been set at 17.5% and 13.5% per annum, respectively.
At the same time, reserve requirements for funds attracted in national currency and non-convertible currencies have been raised by 3 points, to 30%, effective from May 16 to June 15. Reserve requirements for convertible currencies have also been increased by 3 points, to 33%.
The BNM said in a press release the decision is aimed at easing inflationary pressures, protecting the population’s savings, stimulating the growth of rates on bank deposits and, as a result, maintaining financial stability.
The decision is based on a new inflation forecast that comes in the context of the effects of the pandemic crisis and the war in Ukraine, with a severe impact on the socioeconomic situation in the Republic of Moldova. In particular, the forecast shows that inflation will be higher and more persistent and requires the application of more restrictive monetary policy measures that will allow the creation of conditions for a return to equilibrium and economic growth at the potential level, says the NBM.
On May 13, the NBM is due to publish its second Inflation Report for the current year.
