The official reserve assets are almost US$3.053 billion. They meet all the sufficiency criteria and ensure about 4.7 months of forecast imports of goods and services, the minimum recommended level being of three months. According to the governor of the National Bank of Moldova Octavian Armașu, this fully covers the foreign public debt in the short term and this way supports Moldova’s credibly at international level, IPN reports.
In a common interview for the press, the governor said these are the assets that the National Bank can use and control at any moment to support the balance of payments, to manage the exchange rate by intervening in the market and to keep confidence in the national currency and the national economy in general. “At the same time, we should not forget that the level of international reserves influences the capacity of an economy to attract external loans. The decline in assets negatively affects the economy, affects the country rating of the Republic of Moldova and the foreign investors’ confidence,” noted Octavian Armașu.
Under the law on the National Bank of Moldova, the international reserves are kept by the central bank at an appropriate level for implementing the monetary and currency policy of the state. In this regard, the National Bank, in accordance with the international practices, determines the sufficiency of the international reserves according to a number of indicators, such as the covering of an adequate import period, the level of covering the foreign debt in the short term, the monetary mass, etc.
Asked how real the redirection of a large part of the country’s foreign exchange reserves as investments to the economy is, Octavian Armașu said the level of reserves is now appropriate for the future sustainability of the international reserves. This way, the use of a part of the international reserves, by later converting this into the national currency and increasing the costs in the economy, would considerably impact the fundamental objective of the National Bank – to ensure and maintain the stability of prices. “As a result, the Republic of Moldova would witness an inflation rate with a negative impact on the economy. Also, such operations run counter to the legislation according to which the National Bank cannot provide financial assistance to the state,” said the governor.
He also said that the law bans lending to the state as the foreign exchange reserves cover also the money in circulation. If the National Bank of Moldova lends to the state from the give resources, there will be uncovered money in circulation and this will affect the stability of prices. Namely the maintaining and ensuring of the stability of prices is the fundamental objective of the central bank.
