NBM expects a further reduction in interest rates on loans and considers the base refinancing rate, kept at 6% per annum, adequate to the current situation - Octavian Armasu.
This was stated by the President of the National Bank of Moldova, answering the question of the InfoMarket agency within the framework of the Economic Press Club after the presentation of the third this year's Inflation Review held at the NBM. He recalled that at its last meeting on monetary policy, the NBM kept the base rate applied on the main short-term monetary policy operations at the level of 6% per annum, and this rate is much lower than the current market interest rates on loans. Octavian Armasu stressed that now only for some banking products the interest rates on loans have fallen below 10%. “In general, they approximately remain at the level of 10% per annum and should continue to go down. Adjustment of interest rates in the market occurs with a delay. It is not made overnight. Deposit rates must change to meet the cost of financing by banks, after which banks can cut interest rates on loans. We observe that under the current conditions, the trend of lowering rates continues to manifest itself, and the previous decisions of the NBM on monetary policy are having an effect. We believe that now the basic rate applied on the main short-term monetary policy operations, at the level of 6% per annum, is adequate for the current situation. We set this rate depending on our inflation forecasts,” the head of the National Bank said. To another question from journalists about whether it is the right time for citizens to take mortgage loans amid lower interest rates, Octavian Armasu replied that mortgage rates are adjusted depending on the market situation, and today there are some banks that offer them at a lower rate 10% per annum. “This rate cut trend will continue. I urge citizens to follow the evolution of rates and, depending on their intentions to buy housing and take out loans, make appropriate decisions. Maybe the real estate market will react to this decrease in interest rates. Accordingly, it will be necessary to find a balance between risks here,” the head of the National Bank said. // 14.08.2023 — InfoMarket.
