August 1 (SeeNews) - Moldova's central bank has decided to increase its key rate to 7.5% from 7.0% in an effort to ease inflationary pressure, it said.
The decision is aimed at alleviating inflationary pressure and creating favourable monetary conditions for maintaining inflation within the 3.5%-6.5% target band in the medium term, the central bank, BNM, said in a statement late on Wednesday.
"Inflation will increase by the end of 2019 as a result of the impact of the evolution of the national currency in the first half of the year, the increase in food prices on the global markets, regulated prices, and the policy of stimulating interest rates on loans and deposits to back consumption," the BNM said.
The central bank also decided to raise interest rates on overnight loans to 10.5% from 10.0% per year and on overnight deposits to 4.5% from 4.0% per year.
The reserves ratio on deposits in local and non-convertible currency and the required reserves ratio on deposits in freely convertible currency was kept unchanged at 42.5% and 17.0%, respectively.
Moldova posted an annual consumer price inflation of 4.4% in June, down from 4.6% in the previous month, the National Bureau of Statistics said earlier this month.
BNM revised upwards its 2019 inflation projection by 0.2 percentage points (pp) to 5.1% in May. In 2020, consumer prices are expected to rise by 6.5%, as much as the central bank projected in February.