September 9 (SeeNews) - Moldova's central bank, BNM, has cut the key interest rate it uses in repo deals with commercial banks to 5.0% from 7.0% due to slowing inflation, it said on Wednesday.
The central bank also lowered the interest rate on overnight loans to 7.5% from 9.5%. The rate on long-term loans with maturity of more than five years was also cut by two percentage points to 5.0%, BNM said in a statement.
The easing of BNM’s monetary policy is determined by the consistently downward inflationary trend, the central bank said.
Moldova’s August consumer prices fell by 1.1% month-on-month, following a 0.6% monthly fall in July. Year-on-year, the country's consumer price index (CPI) dropped by 2.2% in August compared to a 0.5% fall in July.
The central bank also cut its minimum reserve requirements on leu-denominated liabilities of Moldovan commercial banks by two percentage points to 8.0%. The minimum reserve requirements on foreign currency liabilities were slashed by four percentage points to 8.0%.
In August, BNM cut its key interest rate to 7.0% from 8.0%.
Moldova's Economy Ministry projected in June that end-year inflation will reach up to 6.0%. In April, the International Monetary Fund cut its end-year inflation forecast for the country to 4.0% from 9.0%.