The NBM has kept the base rate applied to the main short-term monetary policy operations at the previous level of 3.6% per annum
This decision was made by the Executive Committee of the National Bank of Moldova at its meeting on November 5. It also left unchanged the interest rates on overnight loans at 5.6%, on overnight deposits - 1.6%, on repo operations - 3.85% per annum. At the same time, the NBM's decision reduced the required reserve ratio applied to funds attracted in Moldovan lei and non-convertible currency, starting from the period of application of required reserves in Moldovan lei from November 16 to December 15, from 29% to 27% of the calculation base. The required reserve ratio applied to funds attracted in freely convertible currency was also reduced, starting from the period of application of required reserves in freely convertible currency on November 16 - December 15, from 39% to 36% of the calculation base. According to the NBM, the relevant decision was made in the context of further dissemination of the consequences of previous decisions on monetary policy, given the delays associated with their transmission. By deciding to simultaneously reduce the required reserve ratios in Moldovan lei and in freely convertible currency, the NBM aims to reduce the cost of lending. This fact will contribute to further support for the private sector lending process and stimulation of the national economy. The NBM notes that the combined measures to stimulate monetary policy, both a consistent reduction in the base rate and a reduction in required reserve requirements, will lead to an increase in excess liquidity in the banking system by the end of this year. The current and projected volume of liquidity will allow banks to lend to both businesses and the population, as well as invest in government securities. Herewith, in conditions when the seasonal demand for cash and loans exceeds the forecast developed in the current forecast round, the National Bank of Moldova is injecting additional liquidity into the money market by further reducing reserve requirements. The National Bank emphasizes that the current assessment of real monetary conditions in the deposit, loan and foreign exchange markets indicates a favorable situation for maintaining inflation within ±1.5 percentage points of the target of 5%. The latest macroeconomic information largely confirms the main assumptions and conclusions reflected in the NBM inflation report released in August 2024. The NBM said it will continue to monitor domestic and external economic developments to ensure price stability. The next meeting of the NBM Executive Committee on monetary policy will be held on December 12, according to the approved calendar. It should be noted that at the previous meeting, on September 19, the NBM also kept the base rate applied to the main short-term monetary policy operations at 3.6% per annum. The last time the NBM changed the base rate applied to the main short-term monetary policy operations was on May 7, reducing it by 0.15 percentage points - from 3.75% to 3.6% per annum. In total, it has already changed three times this year. In particular, it was reduced from 4.75% to 4.25% on February 6, to 3.75% on March 21 and to 3.6% per annum on May 7. // 05.11.2024 — InfoMarket
