January 31 (SeeNews) - Moldova's central bank, BNM, has decided to maintain its key rate at 6.5%, striving to keep inflation close to the target level, as inflation slowed down.
"The decision was adopted on the basis of the macroeconomic analysis and the assumptions made in the new medium-term inflation forecasting round. The analysis indicates an insignificant slowdown in the economic activity growth rate in 2018 and 2019, driven predominantly by disinflationary pressures of aggregate demand, as well as by the high base effect set in 2017," BNM said in a statement late on Tuesday.
BNM also decided to maintain the interest rates on overnight loans at 9.5% per year and on overnight deposits at 3.5% per year.
The central bank maintained the required reserves ratio on deposits in local and non-convertible currency at 40.0% of the base and the required reserves ratio deposits in freely convertible currency at 14.0% of the base.
Moldova's consumer prices rose by 7.3% in 2017, after increasing by 6.4% in the previous year.
According to the current forecast, Moldova's annual inflation rate will continue to decrease from 7.3% recorded in December 2017 to around 2.5% in the fourth quarter of 2018. Subsequently, it will return within the range of ± 1.5 percentage points from the 5.0% target in the second quarter of 2019," BNM said.
Moldova's central bank now projects 3.7% inflation in 2018 and 4.7% in 2019.
BNM last revised its key monetary policy rate in December, lowering it by 0.5%, to 6.5%.
BNM will hold its next rate-setting meeting on March 1, 2018.
(1 euro =20.7659 Moldovan lei)