In Moldova, the decline in the sale of foreign currency by individuals for 2 months of quarantine turned out to be the strongest in the history of the country - IDIS Viitorul.

In Moldova, the decline in the sale of foreign currency by individuals for 2 months of quarantine turned out to be the strongest in the history of the country - IDIS Viitorul.

This was stated by the economist of the Institute Veaceslav Ionita in the program “15 minutes of economic realism”. He noted that the crisis that Moldova is experiencing has a great impact on its economy, and this can be seen in the foreign exchange market through the sale of foreign currency by individuals. In March and April, the volume of transfers from abroad decreased by $ 18 million - to $ 188 million. The largest drop was in April - by 12%. However, as the expert noted, the transfers of citizens do not reflect the situation on the foreign exchange market, and the most relevant indicator is the sale of foreign currency by individuals. Veaceslav Ionita recalled that the largest amount of transfers from abroad was in 2008 - $ 1.6 billion, after which there was a collapse from 2009 with recovery by 2013 and a subsequent drop. Since 2014, the volume of money transfers from abroad to Moldova through banks in favor of individuals has stabilized at $ 1.2 billion. But in fact, people bring money to the country not only in this official way: labor migrants bring cash with them, and that is why, according to the expert, a more relevant indicator of the foreign exchange market is the sale of foreign currency by individuals. According to Veaceslav Ionita, citizens officially transfer $ 1.3 billion a year, and sell $ 2.1 billion in the country. In March-April, we had a collapse in the foreign exchange market compared to last year: individuals sold $ 350 million against $ 560 million. There has not been such a fall since 2009. The smallest amount of currency was sold in April 2020 - $ 135 million, and this is the lowest volume in the last 10 years. Weak sales of foreign currency were in 2015, 2016 after the banking crisis, amounting to $ 175 million. According to Veaceslav Ionita, in May there will probably be the same low level of foreign currency sales. According to him, another element explaining the low sales of foreign currency is that the population in March-April had virtually no ordinary consumption. Firstly, the majority of non-food trading units did not work, and these goods account for more than 40% of the population’s expenses, and secondly, people who have a stable income refuse to buy expensive things, for example, cars, because in a crisis buying a car for them is not the most important. Veaceslav Ionita also noted that according to the currency index of Moldova (IVM 10), the Moldovan leu has depreciated a little since the beginning of the year against the euro and the dollar, but against ten currencies the Moldovan leu is almost 2% stronger. “For example, the national currency appreciated by almost 9% against the Ukrainian hryvnia, and the leu in relation to the Turkish lira is 10% stronger, but it was stronger earlier by 18%. This means that Turkish production was 18% cheaper. We took these countries because they are the main suppliers of products to the local market. And domestic producers cannot cope with local competition, because only the exchange rate makes domestic production more expensive compared to neighboring countries, ”said Veaceslav Ionita.//04.06.2020 — InfoMarket.

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