The Administration Board of the National Bank of Moldova decided to increase the base rate on the main monetary policy operations from 8.5% to 13.5%, IPN reports. According to the National Bank governor, the 5% increase represents significant toughening up of the monetary policy. The central bank will continue to sell currency on the market in a move to stabilize it, but in a rational way because the foreign exchange reserves are not a ‘bottomless sack’, Dorin Dragutanu said in a news conference.
The base rate is raised in order to discourage the commercial banks from refinancing, causing thus the reduction of the money mass, so as to destabilize the exchange rate of the leu.
Dragutanu reiterated that the situation on the currency market was influenced by the 20% decline in the volume of remittances from abroad in the last quarter of last year and a lower than projected decrease in imports. This led to a worse balance of trade and to a deficit of foreign currency in the country. Thus, the demand for foreign currency on the part of economic entities was 78% satisfied in 2014. The deficit was covered owing to the central bank’s intervention. In January, the demand was only 47% satisfied.
Asked when the effects of the new measures to toughen up the monetary policy will be visible, Dragutanu said many banks perceived the National Bank’s signal and increased the interest rate on deposits in lei so as to stimulate the population to deposit money in lei.
Dorin Dragutanu denied the assertions of some independent experts that the central bank has no other instruments for stabilizing the currency market. “These instruments cannot be used up. It is important to use them on time and rationally,” he stated, adding that besides the National Bank’s instruments, measures should be taken to stimulate the economic development and promote reforms in economy.
At currency exchange facilities, the euro today was sold for even 29 lei. The official exchange rate of the central bank was 22.37 lei per euro and 19.59 lei per US dollar.
