The National Bank of Moldova (NBM) keeps the basic refinancing rate at the same level of 2.65% per annum, but cuts the required reserve ratio on attracted MDL funds by 2 percentage points - to 28% of the calculated base.
The corresponding decision was approved by the NBM Executive Committee at an extraordinary meeting on monetary policy held on April 5. According to the National Bank, in particular, it keeps the base rate applied to main operations of short-term monetary policy at 2.65% per annum, and also leaves unchanged interest rates on overnight loans and deposits at 5.15% and 0.15%, respectively. At the same time, by the decision of the NBM, the rate of required reserves from funds attracted in national currency (MDL) and in non-convertible currency was reduced by 2 percentage points - from 30% to 28% of the calculated base, while the required reserve ratio from funds attracted in freely convertible currency remained at the same level - 30% of the calculated base. As emphasized by the National Bank, the corresponding decision continues a number of measures of the NBM to mitigate the impact of the pandemic and supports economic recovery by increasing aggregate demand. The National Bank of Moldova also maintains an increased trend in lending activities, ensuring that adequate liquidity is sufficient for this purpose, while reducing lending costs in support of the business environment. Support is also needed to avoid crowding out, along with increased funding requests from the Ministry of Finance. As noted by the NBM, the decision was based on the analysis and assessment of information related to excess liquidity in the banking system. Thus, after last month the required reserve ratio from funds attracted in MDL and in non-convertible currency was reduced by 2 percentage points; the level of liquidity increased to 7.1 billion lei as of March 16, but later it steadily decreased and reached the level of 3.4 billion lei. This reduction occurred, in particular, due to the payment of taxes by economic agents to the state. The NBM emphasizes that it will continue to monitor the macroeconomic situation and, at the right time, without prejudice to its fundamental goal, will take the necessary measures to maintain a viable and stable banking system. The next meeting of the NBM Executive Committee on Monetary Policy will take place on April 30, according to the calendar published earlier. It should be noted that the last time the National Bank changed the base rate applied to main short-term operations of monetary policy was on November 6, 2020, when it was reduced by 0.1 percentage points - from 2.75% to 2.65% and then reached a new record low. At the same time, the National Bank lowered by 0.1 percentage points the interest rates on overnight loans and deposits: on loans - from 5.25% to 5.15%, and on deposits - from 0.25% to 0.15%. At its last meeting on March 5 this year, the National Bank kept the basic refinancing rate at the same level of 2.65% per annum, but reduced the required reserve ratio on borrowed funds in MDL by 2 percentage points - to 30% of the calculated base. // 06.04.2021 – InfoMarket
