​MOLDOVAN LEI EXCHANGE RATE REACHED ALARMING MARK – MDL 14: US$1 AND MDL 19:1 EURO

The Moldovan lei exchange rate closely approached to an alarming mark: MDL 14: US$1 and MDL 19: 1 Euro

The NBM analytics and experts pay attention to the “seasonal factor”, connected to Easter and May holidays, when legal entities did not work and foreign currency purchases at the market were realized for the import with reserve to pay for goods and products for the entire summer season.

“Thus, the current situation on market is the “top” of the seasonal factor, after which a possible appreciation of lei against the US dollar and Euro is not excluded”, said one of the NBM analysts.

However, he paid attention to the individual currency supply decrease, mentioning that Moldovan citizens, working in Italy, Greece, Spain, who came in visit, had already gone back. This is why people do not exchange so much foreign currency.

As about the NBM position, which is able to influence the national currency exchange rate against the major currencies, the analyst said that the bank sold US$5 million Euros on May 22, thus slowing the decrease in leu exchange rate.

Talking about the “currency expectations” for the near future, he said that usually in July-August period, which is the massive summer vacation time, a particular pressure on Moldovan lei is felt.

“If the NBM will buy expensive currency in this period for the budget replenishment, then the lei exchange rate could not strengthen. It will also be directly influenced by the inflation, seriously monitored by the bank”, said he.

The analyst also drew attention to the other point of view on the lei cheapening, linked to the tax incomes to the state treasury. All the excise taxes and charges are established in the foreign currency, while the export-import agents pay them in lei, the fact that also leads to the charges increase.

“Of course, it would be much better if the treasury replenished not due to indirect, but to direct taxes, but the latter may increase only due to the economy growth, which currently is not observed”, concluded the analyst.

Infotag’s dossier: In early 2014, President of the National Bank of Moldova (NBM) Dorin Dragutanu stated that in April-May the lei exchange rate will begin to win the lost exchange position, but it did not happen in the expected parameters. Now, the NBM says that there are no economical causes for the leu depreciation and that its exchange rate will strengthen at the beginning of summer.