The NBM increased the base rate applied to the main short-term monetary policy operations by 2 percentage points at once - from 3.6% to 5.6% per annum
This decision was made by the Executive Committee of the National Bank of Moldova at a meeting on January 10. At the same time, the NBM also increased interest rates on overnight loans by 2 percentage points - from 5.6% to 7.6% per annum, on overnight deposits - from 1.6% to 3.6%, as well as on repo operations - from 3.85% to 5.85% per annum. As noted in the message of the National Bank, the energy crisis forces the NBM to adopt new monetary policy measures. It should be noted that the first meeting of the Executive Committee of the National Bank of Moldova on monetary policy in 2025 was planned to be held on February 5, according to the previously approved calendar. The National Bank emphasizes that the convening of an unscheduled meeting is due to the need to adjust monetary policy to mitigate pressure on the inflation process in the context of the recent increase in tariffs. The decision taken by the NBM to increase the base rate applied to the main short-term monetary policy operations was based on the analysis and assessment of the latest macroeconomic information related to the external and internal environment, in particular, the prospects for accelerating inflation against the backdrop of an increase in domestic tariffs for gas, heat and electricity, adjusted in December 2024 and January 2025. The NBM emphasizes that a sharp increase in energy prices will create additional inflationary pressure on the inflation process in terms of production costs and prices, as well as inflation expectations of households and economic agents. In these circumstances, the adjustment of the short- and medium-term inflation forecast increases confidence that the annual inflation rate will remain above the upper limit of the ±1.5 percentage point variation corridor from the 5% annual inflation target for several quarters of 2025. "Thus, the increase in the base rate is aimed at mitigating the secondary effects of the change in regulated tariffs on inflation and anchoring inflation expectations in order to return the annual consumer price inflation rate to the target corridor within a reasonable time frame. The NBM stated that it will continue to closely monitor the evolution of inflation components and factors that may affect its dynamics, the domestic and external macroeconomic situation, as well as the risks and uncertainties associated with the evolution of inflation in the short and medium term. At the same time, the NBM notes that in order to achieve the fundamental goal of ensuring and maintaining price stability, it reserves the legal right to intervene at the appropriate time by adjusting monetary policy instruments. The next meeting of the NBM Executive Committee on monetary policy promotion will be held on February 5, according to the approved calendar. It should be noted that at the previous meeting, on November 5, 2024, the NBM 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, 2024, reducing it by 0.15 percentage points - from 3.75% to 3.6% per annum. In total, it changed 3 times in 2024. 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. // 10.01.2025 – InfoMarket.
