Moldova's central bank left is key policy rates steady at 19.50 percent, along with its other key rates, but raised its forecast for inflation this year to 9.7 percent and to 11.9 percent for 2016 to reflect the impact of the leu's depreciation along with higher food prices due to drought.
The National Bank of Moldoval (NMB), which has raised its rate by 13 percentage points this year, said inflation will exceed the upper limit of its inflation target of 6.5 percent and first return within the range of 6.5 to 3.5 percent by the third quarter of 2017.
The NMB's executive board said it had approved the latest inflation report that will be presented to the public on Nov. 5.
Moldova's inflation rate rose to 12.6 percent in September from 12.2 percent in August, with the depreciation of the leu currency since the beginning of the year raising inflationary pressures on prices of imported goods while tariffs have risen along with higher taxes on some goods.
The leu has been depreciating since mid-2011and has depreciated by 22 percent this year, quoted at 19.95 to the U.S. dollar today.
Moldova is a former Soviet state located between Romania and the Ukraine.