Moldova's annual inflation has returned to the NBM target corridor, reaching 6.3%, and the National Bank is using all available monetary policy instruments to fight the risks of deflation.
Governor of the National Bank of Moldova (NBM), Octavian Armasu stated this while answering a question of InfoMarket agency within the Economic Press Club after the presentation of the NBM’s fourth Inflation Report this year. He said that the NBM is implementing the necessary monetary policies to avoid the risks of deflation, and a stimulative monetary policy is now being applied. "Inflation has already returned to the variation corridor and we will keep it there by using monetary policy tools and we will be helped a lot by expansionary fiscal policy as well. This will reduce the risks of deflation," Octavian Armasu emphasized. He pointed out that when the NBM makes an inflation forecast, it analyzes all scenarios and risks, and the new inflation forecast also contains an assessment of all scenarios and risks and possible monetary policy measures. "We have all monetary policy instruments to fight the risk of deflation," the NBM Governor emphasized. Referring to the different evolution of inflation and monetary policy trajectory in Romania and other Eastern European countries, he pointed out that the structures of the economies are different. "Our economy is smaller, more volatile and we are already in a different phase of the economic cycle. We had higher inflation, we had a more aggressive monetary response than others, and we are accordingly already back in the inflation target corridor. In other countries, the economy and inflationary processes manifest themselves differently, there is a different domestic demand, different purchasing power, and, accordingly, the economic cycle occurs differently, its phase is longer there. But they will also come to the moment of easing their monetary policy, and this applies to all EU countries," Octavian Armasu emphasized. // 14.11.2023 - InfoMarket.
