February 23 (SeeNews) - Moldova's central bank, BNM, decided on Wednesday to maintain its key rate at 9.0%, striving to keep inflation close to its 5.0% target.
"This decision is aimed at anchoring inflation expectations in the context of restoring and maintaining the inflation rate close to the target of 5.0% in the medium term, with a possible deviation of plus or minus 1.5 percentage points," BNM said in a statement late on Wednesday.
Through its decision, BNM aims to promote a monetary climate conducive to reviving lending and savings and to help domestic economic environment adapt to market volatility related to the external macroeconomic situation, it added.
The monetary policy stance depends on the risks and uncertainties associated with internal and external developments, BNM said. External risks are associated with the increase of international prices for food along with the uncertainty related to a higher international price of oil.
The main internal risks and uncertainties arise from excessive persistence of liquidity in the banking system, from the modification of excise duties, as well as from the quality of the country's 2017 harvest, the central bank said.
Moldova’s agricultural output increased by 18.6% last year, the country's statistical office said last month.
Moldova's consumer price inflation accelerated to 3% year-on-year in January, from 2.4% in December.
The central bank now projects 5.2% inflation in 2017 and 4.9% in 2018.
BNM also decided to keep the interest rates on overnight loans and deposits at 12% and 6%, respectively.
Also, the central bank kept the required reserves for deposits in freely convertible currency at 14%, and the required reserves from deposits in Moldovan and non-convertible currency at the current level of 35%.
"In order to support the proper functioning of the inter-bank money market, the BNM will continue to manage firmly the excess liquidity through sterilization operations, as scheduled," the central bank added.
BNM last revised its key monetary rate in October, lowering it by 0.5%, to 9.0%.
(1 euro = 21.09 Moldovan lei)