Moldova's Central Bank reduced basic rate to 9%
In its sitting on 18 June 2009, the National Bank of Moldova (NBM) Board of Directors decided to reduce by 1.0 percentage point to 9.0% annually the basic rate applied for the main monetary policy operations of the NBM as well as to reduce the rate to overnight and long term loans by 1.0 percentage point to 11.5% and 9.0% respectively annually.
At the same time, with a view to increase the volume of liquidity available in the banking system, the central bank approved the reduction of the compulsory reserves from the means attracted in national and foreign currency by the banks by 1.5 percentage points, from 17.5% to 16.0%.
According to the NBM, this liberalization of the monetary policy will make available a volume of nearly 180 mln lei and equivalent of nearly 24 mln USD of the banks’ resources for crediting the real sector of the economy. At the same time, the orientation to the reduction of the interest rates to loans and deposits will be further stimulated.
The decision to reduce the rates is determined by the continuous ascending trend of the inflation registered in June 2008. According to the information provided by the National Bureau of Statistics in May 2009, during the last 12 months a deflation of 1.6% was registered. Although by the end of 2009 it is expected a comeback to the inflation trend, the inflation rate will in no case exceed the level that might cause risks for the price stability in Moldova.
The NBM will closely monitor the situation on the internal and external monetary, foreign exchange and crediting markets, and will undertake quick and adequate measures required for the fulfillment of its fundamental objective.
We remind that the last change of the monetary policy interests was operated by the NBM on 14 May 2009, when the basic rate was set at 10%. Also back then, the percentage rate for the overnight credits was set at 12.5%, overnight deposits at 2%, and for the long term loans (more than five years) at 10%.
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