Tuesday, January 30, 2018

Moldova maintains rate, sees steady drop in inflation

       Moldova's central bank left its basic interest rate at 6.50 percent, saying this decision was based on the latest economic forecasts that showed a slight easing of the rate of growth in 2018 and 2019, mainly due to disinflationary pressures on aggregate demand and the effect of a high base in 2017.
      Today's decision by the National Bank of Moldova (NBM) follows the bank's shift to a neutral policy stance in December 2017 after 22 months of rate cuts in which the key rate was lowered by 13 percentage points from February 2016.
      The NBM's latest forecast shows that inflation will decline steadily from 7.3 percent in December to around 2.5 percent by the fourth quarter of 2018.
      Subsequently, inflation is seen returning to the bank's target of 5.0 percent, plus/minus 1.5 percentage points, in the second quarter of 2019.
      For the full 2018 year the NBM forecasts average inflation of 3.7 percent and 4.7 percent for 2019.
     In the third quarter of 2017 Moldova's economy grew by an annual rate of 5.4 percent, up from 2.5 percent in the second quarter, supported by household consumption and fixed investments.



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