UPDATE 1 - Moldova C-bank Cuts Key Interest Rate to 15.5% from 17% on Slowing Inflation

"Year-on-year inflation of 9.8% in October was in line with the central bank's projections for the current year. BNM analysis showed that inflation will continue to slow in the coming period," BNM said in a statement.

Moldova’s monthly inflation quickened to 0.8% in October from 0.6% a month earlier. Year-on-year, consumer price inflation slowed to 9.8% in October from 10.7% in September.

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 19%.

BNM said that it will continue to exercise tight control over liquidity on the foreign exchange market aiming to ensure stability of the prices in the country.

Last month the International Monetary Fund noted progress in Moldova's efforts to curb inflation. The Fund sees Moldova's consumer prices growing by 13.7% in 2008. The government has forecast year-end inflation of 11.5% for 2008, compared to 13.1% in 2007.

The central bank last changed its key rate in September, reducing it to 17% from 18.5%.