The NBM kept the base rate applied to the main short-term monetary policy operations at the same level of 3.6% per annum, but reduced the norms of required reserves of banks
This decision was adopted by the Executive Board of the National Bank of Moldova (NBM) at a meeting on December 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, by the decision of the NBM, the required reserves ratio applied to the attracted funds in MDL and in non-convertible currency was reduced, starting with the period of application of required reserves in MDL from December 16, 2024 - January 15, 2025, from 27% to 25% of the calculation base, and starting with the period of application of required reserves in MDL from January 16, 2025 - February 15, 2025, from 25% to 22% of the calculation base. Also, the required reserves ratio applied to attracted funds in freely convertible currency was reduced, starting from the period of application of required reserves in freely convertible currency from December 16, 2024 to January 15, 2025, from 36% to 34% of the calculation base, and starting from January 16, 2025 - February 15, 2025, from 34% to 31% of the calculation base. According to the NBM, the respective decision was adopted by the National Bank of Moldova in the context of the ongoing transfer of the effects of the previous monetary policy decisions, taking into account the delays related to their transfer. At the same time, the NBM's decision to reduce the required reserves ratio during two consecutive periods of its application is aimed at increasing the predictability of the monetary policy in conditions of information asymmetry and adjusting the behavior of money market participants in order to create monetary conditions necessary to maintain inflation within a medium-term range of ±1.5 percentage points from the target of 5%. At the same time, the decision to simultaneously reduce the norms of mandatory reserves in Moldovan lei (MDL) and in freely convertible currency will reduce the cost of crediting, further supporting the crediting process and having a positive impact on the national economy. The National Bank emphasizes that the cumulative measures of monetary policy stimulation will increase the excessive liquidity in the banking system and will allow banks to lend to individuals and legal entities, as well as to invest in state securities. The NBM points out that the latest macroeconomic information largely confirms the main assumptions and conclusions reflected in the Inflation Report for November 2024. The balance of risks for the inflation outlook is balanced with a slight inflationary bias in the short term. Uncertainties remain pronounced. The main sources are the tense situation in the region, moderate regional demand related to mutual sanctions, uncertainty about agricultural production and adjustments in tariffs for housing and utilities services. The National Bank of Moldova stated that it will continue to closely monitor the internal and external macroeconomic situation, risks and uncertainties related to the evolution of inflation in the short and medium term, and will intervene at appropriate times by adjusting the monetary policy instruments in order to achieve the main objective of ensuring and maintaining price stability. The current assessment of the real monetary conditions on the deposit, credit and foreign exchange markets indicates a favorable situation in order to ensure the maintenance of inflation within the range of ±1.5 p.p. from the target of 5%, which is considered optimal for Moldova's growth and economic development in the medium term. It should be mentioned that at the previous meeting, on November 5, the NBM also kept the base rate applied to the main short-term monetary policy operations at the level of 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, decreasing it by 0.15 p.p., from 3.75% to 3.6% per annum. In general, it has already been changed 3 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. As previously reported, the first meeting of the Executive Committee of the National Bank of Moldova on monetary policy in 2025 is scheduled to be held on February 5, according to the approved calendar. // 05.12.2024 - InfoMarket
