The monetary policy measures taken by the National Bank of Moldova (NBM) lately have created conditions for inflation to diminish further, so that in October it’s expected to reach the range of inflation variation. Tempering inflation and reducing rates provide a positive outlook for economic activity, according to the third report on inflation, presented today by NBM president Octavian Armașu.
The report notes that this year the NBM board took several stimulating monetary policy decisions, consecutively reducing the base rate to 6% annually, a level kept unchanged in the most recent monetary policy decision.
“We can safely say that inflation is no longer a risk for investment and consumption, as the monetary conditions created by the NBM aim to support economic recovery and growth. In fact, since the beginning of the third quarter we have seen signs of the economic recovery”, said Octavian Armașu.
According to NBM forecasts, inflation will decrease until the first half of next year, eventually reaching the inflation target near the end of the forecast horizon. Throughout the forecast period, aggregate demand will be negative, being determined by the restrictive nature of real monetary conditions and the negative impact of external demand. The positive fiscal stimulus will support domestic demand to a certain extent.
In the coming period, the NBM will monitor international developments, with an emphasis on the oil and natural gas markets, on sugar and grain quotations, as well as on other developments related to the war in Ukraine.
The central bank adjusts the conditions on the monetary, credit and foreign exchange markets in advance, thus aiming to keep inflation close to the target of 5% in the medium term and creating preconditions for macroeconomic policies associated with economic growth.
