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Moldova's c-bank raises key rate to 7%

Moldova's c-bank raises key rate to 7% Moldova's national bank - BNM

CHISINAU (Moldova), June 20 (SeeNews) - Moldova's central bank has decided to increase its key rate to 7.0% from 6.5%, aiming to keep inflation close to the target level, it said.

The decision was dictated by inflationary pressures caused in particular by the increase of the wage bill fund and consumer credits, as well as because of the positive fiscal impulse in the current and next year due to an expected release of external financing, the central bank, BNM, said in a statement late on Wednesday.

Similarly, expectations about the external environment and recent developments in the national economy have been taken into account, BNM added.

The central bank also decided to raise interest rates on overnight loans to 10.0% from 9.5% per year and on overnight deposits to 4.0% from 3.5% per year.

The reserves ratio on deposits in local and non-convertible currency was kept unchanged at 42.5%.

However, the required reserves ratio on deposits in freely convertible currency was increased to 17.0% of the base from previous 14.0%.

Moldova posted annual consumer price inflation of 4.6% in May, up from 3.2% in the previous month, the National Bureau of Statistics said on Monday.

BNM revised upwards its 2019 inflation projection by 0.2 percentage points (pp) to 5.1% last month. In 2020, consumer prices are expected to rise by 6.5%, as much as the central bank projected in February.

(1 euro= 20.3883 Moldovan lei)