The main goals of the NBM are the independence of the bank, contribution to Moldova’s European path, price stability and support for financial intermediation to stimulate economic activity and sustainable economic growth - Anca Dragu.
This is stated in the preface of the President of the National Bank of Moldova to the Annual Report of the NBM for last year. The head of the National Bank noted that 2023 was marked by the persistence of a complex geopolitical context, and in economic terms, a steady process of deflation and a slow return of the economy to an upward trend. According to her, these remarkable results were facilitated by the implementation of a restrictive monetary policy, correctly and timely set, as well as measures to ensure the country's energy independence, as well as other external factors. The impact of monetary policy decisions through the transmission mechanism led to the fact that in October 2023, inflation returned to within ±1.5 percentage points of the target of 5% and has remained in this range ever since. In 2023, the Moldovan economy grew slightly - by 0.7% after a decline in 2022. Disinflationary pressure against the backdrop of a deficit in aggregate demand and a negative fiscal impulse, lower prices for energy and food products in the regional market, combined with government support for the population, the spread of measures previously taken by the National Bank of Moldova made it possible to reduce inflation and return interest rates to an acceptable level. As Anca Dragu noted, this fact outlines favorable prospects for the future in the negotiation process for accession to the EU, and the main contribution of the NBM is clearly reflected in the transformation of Moldova into an interesting place for investors. According to her, the monetary policy of the NBM, aimed at ensuring a sufficient level of liquidity in the banking system, provided the necessary conditions for lending to the real sector. Investor appetite for government securities continued to grow: the total volume of government securities in circulation reached a record high, and the volume of net issues was 4 times higher than the previous year. The Ministry of Finance issued bonds with a maturity of 10 years for the first time, reflecting increased investor confidence in government instruments. 2023 was also a year of improvement in the situation on the foreign currency market. With the trade deficit falling and confidence in the currency restored, it has strengthened against both the euro and the US dollar, unlike the previous year when it lost ground amid geopolitical instability and the economic downturn. The increase in official reserve assets by 21.9% - to $5.45 billion, ensured a high degree of adequacy of foreign exchange reserves, which indicates the resilience of our economy to crisis situations, and is also a positive signal for investors and creditors. “Moldova's banking system is stable, strong, well capitalized and well managed thanks to reforms. The resilience of Moldovan banks has been demonstrated during numerous crises: despite all the problems, our banks have remained resilient. The effectiveness of banking reform is widely recognized and appreciated, including by our partners and international organizations. At the same time, we are also aware of the expectations of the beneficiaries of financial services, especially small and medium-sized enterprises, which have the potential for economic growth,” noted the President of the NBM. According to her, the NBM is also very active in the field of payment services, which are necessary for both citizens and businesses. On January 30, the NBM submitted to the European Payments Council Moldova's application to join the Single Euro Payments Area (SEPA). SEPA membership benefits all members as it provides fast, transparent and secure payments at sustainable prices. On March 12, the National Bank of Moldova launched for the first time the MIA Instant Payment System, which offers citizens a fast, secure and cheap way to make transactions. As Anca Dragu noted, the NBM participates in the European integration of Moldova, playing a leading role in three sections of the EU accession negotiations: free movement of capital, financial services and economic and monetary policy. “We are working to harmonize the legislation and practices of the financial sector of Moldova with European standards. This process of reforms to join the European Union in itself represents a point of increased investor attention to Moldova, which leads to an increase in investment. “In conclusion, all the reforms that will take place in the next few years and that stem from the negotiations on these chapters with the European Union represent many reform measures that will be felt and will certainly lead to an increase in investor confidence,” said the head of the National Bank. She noted that the NBM has extensive experience in the field of banking supervision. Herewith, the close relationship between the non-banking financial market and the banking system has demonstrated the need for an integrated financial market architecture. Thus, regulation and supervision in these sectors were unified in 2023, when the NBM assumed powers over the insurance sector and non-bank lending. “We are currently making ongoing efforts to improve regulatory, supervisory, corporate governance and risk management practices in the non-banking financial sector. We want both insurance companies and the non-bank lending market to develop and provide quality services to both citizens and companies,” emphasized Anca Dragu. According to her, the independence and integrity of the bank, contribution to Moldova’s European path, price stability and support for financial intermediation to stimulate economic activity, sustainable growth of the Moldovan economy and the convergence process are the goals of the NBM for the near future. “Moldova must become a member of the European Union. Belonging to this community is a guarantee of peace, security, democracy and prosperity. These are four fundamental elements of building a safe and stable future, which we are building together with the entire society,” emphasized the President of the NBM. // 03.06.2024 - InfoMarket.
