March 8 (SeeNews) - Moldova's central bank decided to maintain its policy rate at 2.65% aiming to help relaunch economic activity and mitigate risks associated with a negative fiscal momentum amid growing political uncertainty.
Interest rates on overnight loans and deposits were maintained at 5.15% and 0.15% annually, respectively, the central bank, BNM, said in a press release on Friday.
At the same time, the required reserve ratio from the means attracted in Moldovan lei and in non-convertible currency were cut by two percentage points, up to 30.0% of the calculation base.
The central bank explained that its decision aims to create monetary conditions that contribute to the return of inflation in the range of plus/minus 1.5 percentage points from the target of 5% This is a follow-up to monetary policy stimulus measures adopted in the second half of the previous year, it added.
Moreover, the decision aims to help maintain adequate liquidity and, in particular, the upward trend in lending to the real economy, as well as lowering the cost of bank loans.
Also, the bank said it aims to mitigate the risks associated with a negative fiscal momentum in the context of intensifying political uncertainty.
The country is currently in a middle of a political crisis as its pro-European president Maia Sandu hinted that she will not comply with a top court ruling obliging her to hold new talks with political parties in order to nominate a new prime minister. Sandu also said that she will continue to push for early elections or for a referendum for her dismissal.
Finally, the decision to leave the key rate unchanged corresponds to the strategic objective of balancing the conditions for financial intermediation in national currency and foreign exchange, the central bank added.
The next meeting on promote monetary policy will take place on April 30.
The BNM last changed its policy rate on November 9, when it cut it to 2.65% from 2.75%, taking into account the domestic disinflationary trend.
Moldova's consumer prices rose 0.22% year-on-year in January, compared to 0.39% in the previous month.
BNM cut its 2021 inflation projection by 0.7 percentage points to 1.8% on February 5.
(1 euro = 21.15 Moldovan lei)