February 8 (SeeNews) - Moldova's central bank said it decided to lower its base rate to 17% from 20% to ensure the continuity of stimulus measures in the context of the easing of monetary policy started at the end of 2022 to support the creation of a disinflationary macroeconomic framework.
Interest rates on overnight loans and deposits also decreased by 3 percentage points - to 19% and 15% per annum, respectively, the central bank, BNM, said in a press release on Tuesday.
This constitutes the second cut in BNM's key rate since August 2022, when the central bank had set it at 21.5%, the highest value since 2001.
The decision aims to support the balancing of the national economy by creating monetary conditions for boosting and accelerating domestic aggregate demand, as well as the revival of consumption by activating the channels of the transmission mechanism, including the lending one.
Based on its current forecast, the central bank said it sees annual inflation trending rapidly downwards in 2023, returning to the target variation range in 2024, where it will remain until the end of the forecast horizon.
In average terms, the inflation rate sat at 32.1% in the fourth quarter of 2022, 0.1 percentage points lower than the level anticipated by the central bank in the Inflation Report of November 2022. The current forecast projects average annual inflation at 13.7% and 5.5% in 2023 and 2024, respectively.
The BNM's executive board will hold its next monetary policy meeting in March.