The year 2022 will be characterized by the stability of the Moldovan leu, with a slight depreciation tendency, said economist Veaceslav Ioniță, who considers that the National Bank of Moldova (NBM) will most probably resort to prudent interventions that will enable the leu to follow a balanced path. The expert of the Institute for Development and Social Initiatives “Viitorul” anticipates that the supply and demand on the currency market will stabilize this year, while the exchange rate of the leu against the dollar and the euro will continue to be stable, with a slight depreciation tendency in the leu, IPN reports.
According to the economist, the consumer loans that grew dramatically in 2021 and created a currency shortage will be moderate in 2022. The energy shock will be much smaller than in 2021, as will the currency. “In 2021, the leu was maintained by injecting US$305 million. I hope that inflation in 2022 will be lower and will determine a slight depreciation of the leu,” the expert stated in the program “Economic Analyses with Veaceslav Ioniță”.
In Moldova, the exchange rate is influenced by the currency supply, currency demand and the central bank’s interventions on the currency market. In 2021, as during other years, the NBM actively intervened on the currency market to ensure the appreciation or deprecation of the Moldovan leu, depending on the market tendencies. In the short run, the exchange rate is the main instrument for controlling inflation in the Republic of Moldova. A higher inflation means shock prices for the population as the import prices of goods that prevail in the consumption of Moldovans depend on the exchange rate. When the leu depreciates, the prices grow. When the leu appreciates, the prices decline.
The economic analyst noted that the population is the main market player in the Republic of Moldova and this always has positive net sales. There are also the business entities that also need currency. The population sells currency, while the business entities purchase it. The net sales of currency that enter the currency market are the difference between what is sold and what is bought by the population. In 2021, the population sold US$4 billion, by US$600 million more than in 2020. The large volume of currency sales in 2021 is partially due to the savings made in 2020.
Veaceslav Ioniță said that since the declaring of independence until present, the NBM bought about US$2 billion on the currency market, offering instead lei for the needs of the citizens and the economy. This value was achieved in 2013. After the bank crisis of 2014, the central bank had to sell US$1 billion. Later it recovered up to US$2.35 billion. Last year it sold US$300 million, but the currency reserves of the institution practically weren’t touched owing to the foreign support from the EU and IMF. In 2021, the currency exchange reserves reached a record high of US$4.073 million. As a result of interventions last year, following the tempering of the exchange rate, the NBM’s reserves declined to US$3. 773 billion, but then rose to US$3.9 billion towards the end of the year.
