Government rejects initiative of MP regarding the approval of National Bank’s budget

The Government rejected the initiative of the MP Valeriu Guma regarding the approval of the budget of the National Bank of Moldova (BNM) by the Parliament. In the cabinet’s opinion, according to the legislation in force regarding the central banks, approving the budget on its own is a major premise of the financial autonomy of this body. „The international practice shows that the budget of the central bank cannot be the subject of any limits, as they might impede significantly the implementation of its main goal. More than this, IMF recommendations stipulate the need to strengthen the financial autonomy of the National Bank, including by special provisions in the law regarding the approval of its budget,” in light of the notice of the government to the deputy’s proposal. At the same time, pursuant to the Memorandum on Economic and Financial Policies, concluded on 14 April 2006 by the government and BNM and accepted by IMF within the Financing Program for Economic Growth and Poverty Reduction Strategy (SCERS), it was drafted the bill for changing and completing the Law on BNM. The Memorandum includes consolidation of BNM independence and non-acceptance of direct crediting of the state by the central bank. In this context, the made proposal gets over the provisions of this memorandum, the government noted. On the other hand, initiative’s author, deputy Valeriu Guma considers that limiting the financial report of BNM by the parliament will contribute to their optimizing. According to him, the Court of Accounts also required the changing of this article of the law, as many violations were noted concerning the execution of the costs related to BNM. Guma proposed as well the increase from five to nine of the number of the members of BNM Administration Council, and five of them not to be paid by the bank. According to him, in this way BNM decisions will become more balanced and will not be influenced only within BNM.