September 10 (SeeNews) - Moldova's central bank, BNM, said it has decided to cut its policy rate to 2.75% from 3.00%, taking into account the domestic disinflationary trend.
The decision was taken in conditions in which the direction of consumer prices is determined by disinflationary pressures manifested both in the internal and external environment, BNM said in a press release late on Wednesday.
These conditions refer, on the one hand, to the maintenance of the negative effects of aggregate demand, to the decrease in regulated tariffs for electricity, the appreciation of the national currency, and on the other hand, to the lower dynamics of prices for energy and international food and to the decrease in the global economic activity, the central bank explained.
Moreover, the decision is aimed at achieving the bank's fundamental objective, as well as at supporting the lending process in order to support domestic demand and the national economy.
BNM added that it is using the entire arsenal of monetary policy instruments to keep inflation in the range of 1.5 percentage points on both sides of the medium-term target of 5%, conditioned by a sustainable economic activity, while other stimulus measures are needed to support and amplify this effect, including fiscal and structural ones.
At the same time, against the background of amplification of disinflationary pressures, the bank does not exclude the possibility that inflation will fall below the target band in 2020 and will remain there until the end of next year.
BNM will hold its next monetary policy meeting on October 30.
Moldova's consumer prices rose by 3.45% year-on-year in August, compared to an annual rise of 4.23% in the previous month, the National Bureau of Statistics has said.
(1 euro = 19.6086 Moldovan lei)