The foreign exchange reserves of the National Bank of Moldova are sufficient for ensuring Moldova’s imports during six months and correspond to the money mass in circulation. Owing to the rise in the foreign exchange reserves, the central bank can continue to relax the currency policies that remain yet rather restrictive for the businesses and the population, economist of the Institute for Development and Social Initiative “Viitorul” Veaceslav Ioniță was quoted by IPN as saying in the program “15 minutes of economic realism”.
The expert noted the foreign exchange reserves of the National Bank of Moldova in October 2018 for the first time exceeded US$ 3 billion and the evolution reflects the three crises experienced by the national economy. In 1998, the foreign exchange reserves were US$ 363 million and the crisis that led to the almost thrice depreciation of the lei diminished the reserves almost three times, to US$ 136 million. This depreciation led to the considerable impoverishing of the population, an economic crisis and a political crisis and, consequently, to the replacement of the country’s political elites.
As to the crisis of 2008, Veaceslav Ioniță said the foreign exchange reserves then fell by one third to US$ 1.1 billion. The crisis was less felt by the population as it was a global and regional one. The countries of the region, Russia and Ukraine, devalued their currencies, while Moldova, which was in an election campaign, kept a stable exchange rate at any cost. The central bank consumed only one third of the foreign exchange reserves. But the business sector was affected following the depreciation of the currencies of the countries of the region. The business entities from agriculture sustained losses of over 1.5 billion lei.
According to the expert, the second profound crisis took place in 2014. The reduction in the money mass resulted in the diminution of the loans provided to the economy. Only the loans released to the population increased in volume. Imports declined and the remittances, foreign funding and investment diminished following the banking fraud. The currency inflows decreased from US$ 6 billion to US$ 3 billion a year.
The economist noted the situation of the foreign exchange reserves in Moldova is not critical now and the repressive measures concerning the repatriation of currency no longer have an economic justification.
The program “15 minutes of economic realism” is produced by the Institute for Development and Social Initiative “Viitorul” in partnership with Radio Free Europe.
