Thursday, April 28, 2016

Moldova cuts rate 3rd time this year on falling inflation

    Moldova's central bank cut its base rate for the third time this year on declining inflation.
    The National Bank of Moldova (NBM) cut its rate by another 200 basis points and has now cut its rate by 450 points this year following cuts in March and February.
    The central bank also lowered the rate on overnight rate loans to 18.0 percent from 20 percent and the overnight deposit rate to 12 percent from 14 percent while the ratio on required reserves in convertible currency was left steady at 14 percent along with the ratio on leu and non-convertible currencies at 35 percent.
   The central bank noted that inflation had declined for the third month in a row and although it still remains above the upper limit of its target range, it is heading toward the midpoint of its target.
    Moldova's inflation rate fell to 9.4 percent in March from 10.3 percent in February and 13.4 percent in January.
    The NBM targets inflation of 5.0 percent, within a upper limit of 6.5 percent and a lower limit of 3.5 percent.
    According to the central bank's latest forecast, inflation is seen returning to its target range in the third quarter of this year for an average rate of 7.0 percent before easing to 4.8 percent in 2017.
    The forecast for 2016 inflation was lowered by 3.1 percentage points and 1.8 percentage points for 2017.
    Details of the new inflation forecast will be published on May 5, the bank added.



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