March 5 (SeeNews) - Moldova's central bank said it has decided to cut its key rate to 4.5% from 5.5%, taking into account the domestic disinflationary trend and global economic concerns related to the coronavirus outbreak.
The decision was based on the assessment of recent developments in the external and internal macroeconomic environment, considering the risks and uncertainties created by the coronavirus infection in the global and regional economy, BNM said in a press release on Wednesday evening.
"At this stage, the coronavirus spread causes additional sources of disinflationary pressures on the consumer price level," the central bank said.
At the same time, the uncertainty associated with the coronavirus in investment activity at the global and regional level and a possible distortion of distribution channels could also affect investment developments in Moldova, the BNM said.
The decision was also taken in the context of confirmation of the disinflationary trend forecast by the central bank in its most recent inflation report.
So far, Moldova has no confirmed case of coronavirus. Neighbouring Romania has confirmed 6 cases, out of which one was cured and discharged from hospital, according to the latest data from the health ministry.
BNM also said it has decided to cut interest rates on overnight loans and deposits by 1 percentage point each to 7.5% and 1.5%, respectively.
The central bank lowered its 2020 inflation projection to 5.1% in its latest inflation report issued last month, from 5.9% predicted in November. In 2021, consumer prices are expected to rise by 3.6%, according to the BNM.
Moldova's consumer prices rose by 6.85% year-on-year in January, compared to a 7.5% increase in the previous month, the National Bureau of Statistics, BNS, said last month.
(1 euro = 19.4957 Moldovan lei)