UPDATE 1 - Moldova C-bank Cuts Key Interest Rate to 14% from15.5% on Slowing Inflation

The rate cut, the third one in the last three months, was possible due a slowdown in annual inflation to 8.5% in November, BNM said in a statement. The bank sees inflation slowing down further in the next period.

Moldova's consumer prices remained unchanged in November on a monthly basis, after rising by 0.8% a month earlier. Year-on-year, November consumer price inflation slowed to 8.5% from 9.8% in October.

The central bank also cut its minimum reserves requirements on both leu- and foreign currency-denominated liabilities of Moldovan commercial banks by 1.5 percentage points to 17.5%.

The lower minimum reserves requirements will allow an increase in lending resources of the banking system by 229 million lei ($22 million/15 million euro), $8.7 million and 9.7 million euro, BNM said.

BNM also said that it will continue to carefully monitor the country’s monetary and foreign exchange market and will apply necessary measures to smoothen the impact of the global crisis on the Moldovan economy.

Earlier this week the International Monetary Fund noted progress in Moldova's efforts to curb inflation. The fund sees Moldova's consumer prices growing by around 9.0% in 2008.

The central bank last changed its key rate in November, when it reduced it to 15.5% from 17%.

(1 euro= 15.2153 Moldovan lei)