National Bank raises base rate by one percentage point

The National Bank of Moldova (BNM) raised by one percentage point the base rate, only a month and a half after the last growth by 0.5 percentage points. Thus, the basic rate has been established at the level of 14% annually. According to the central bank, the increase has been operated, especially as a consequence of the evolution of the inflation rate, which, after ten months of the current year reached the level of 10.8%. The basic rate is a reference one, being applied when refinancing commercial banks via REPO buying operations for two months terms of state securities, perfomed within the frameworks of the operations on the open market of the NBM. The Central bank also decided upon increasing the interest rate for the monetary regulation instruments. As a consequence, the interest rate at overnight credits increased from 17% to 18% annually and the Lombard loan facility – from 15% to 16%. The rate for overnight deposits, accepted by the NBM from commercial banks remained constant - 2% annually, as well as the base rate for long term credits (with terms greater than 56 years) maintains at 10.5% annually. These changes operated by the NBM indicate that probably the cost for credit sources on the internal market will continue to rise.