Inflation in Moldova must decrease by the end of 2022 - Octavian Armasu.
The president of the National Bank of Moldova said this in an interview. While answering the question when inflation may return to 5%, according to the forecast of the National Bank of Moldova (BNM), he said that, according to the latest forecast of the National Bank, based on data registered in the middle of 2021, inflation should go down by the end of 2022. According to him, in January-February, the NBM will make a new forecast, while considering new information, which is carefully analyzed taking into account the state budget for 2022, the state of the markets, as well as laws on pensions, the amount of compensations, which altogether will affect the consumer price index in the country. Accordingly, all this will be included in the new forecast, where the NBM will present its view on inflation in 2022. "The NBM will make up the monetary policy according to the new forecast," said Octavian Armasu. While answering the question on whether deposit and loan rates wouldn’t go beyond 10% in the situation when there are expectations for inflation growth in the market, the head of the National Bank said that it is difficult to forecast, because everything is related to supply and demand. "Traditionally, higher inflation leads to higher interest rates, it always happens that way. But on the other hand, if we go back to the supply and demand in the market, I do not think that the interest rates on deposits will go up so much. Yes, they will definitely grow, but to what level I can hardly say. This will be linked to what will be the demand for loan resources. The NBM expects that demand for loans in 2022 will be more moderate in comparison to 2021. This means that demand for deposit resources will also be moderate; therefore the rates should not change significantly. Demand and supply should reach some level of balance in order to satisfy each other as much as possible. This means that we should hardly expect a radical increase in deposit and credit interest rates," said the NBM president. He noted that the NBM is watching everything closely, and as soon as there are any undesirable deviations for the market, the National Bank will apply appropriate measures. "It is important that we have effective tools, we have sufficient foreign exchange reserves, we have some sources to add or, on the contrary, to reduce banks’ liquidity. We are well armed and we feel that we can absorb unexpected shocks effectively enough to respond to the challenges that may come in 2022," Octavian Armasu said. // 27.12.2021 – InfoMarket
