BankingBrief
National Bank of Moldova raises its base rate to 11 per cent
The two-point rise followed annual inflation of 8.60 per cent in September, above the band around the bank's 5 per cent target.
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The National Bank of Moldova raised its base rate by two percentage points to 11.00 per cent on 5 November, the central bank said, pointing to intensifying inflationary pressures and risks to price stability over the medium term. The Executive Board voted unanimously.
The rate on overnight loans rose to 13.00 per cent and the rate on overnight deposits to 9.00 per cent. At its previous decision on 17 September, the board had set the base rate at 9.00 per cent, with overnight loans at 11.00 per cent and overnight deposits at 7.00 per cent.
Repo transactions now carry 11.25 per cent. The board kept the required reserve ratio at 18.0 per cent for funds attracted in lei and non-convertible currency, and at 26.0 per cent for funds in freely convertible currency.
Annual inflation reached 8.60 per cent in September, up 1.64 percentage points from August and above the upper limit of the 1.5 point band around the 5.0 per cent medium-term target. The third-quarter average of 7.30 per cent came in below the projection of the August Inflation Report, mainly because natural gas tariff adjustments were delayed, the bank said.
Its new forecast puts average annual inflation at 7.3 per cent in 2026 and 6.9 per cent in 2027, 0.1 and 0.7 percentage points higher than the previous forecast. Inflation is expected to rise until the end of this year and then ease, staying above the upper limit of the band until the third quarter of 2027. The bank cited expected increases in regulated tariffs, higher oil and fuel prices, higher international food prices from 2027 and excise rises in the first quarter of 2028, and judged the risks to be skewed towards higher inflation through the end of 2026.
Remittances to individuals rose 26.44 per cent year on year in September, according to the decision, and the volume of new lei loans to individuals rose 10.5 per cent in the third quarter, with both consumer and mortgage lending growing. The rate on new lei loans averaged 9.17 per cent, against 5.74 per cent on new lei term deposits.
The new level is the highest since April 2023, Trading Economics reported. Elsewhere in the region, Ukraine's central bank raised its key policy rate to 16.5 per cent in October, while Hungary's central bank held its base rate at 5.50 per cent.
The bank scheduled its November Inflation Report for 12 November. The Executive Board's next monetary policy meeting is on 17 December.