​NBM FORECASTS 6.3% AVERAGE INFLATION IN 2016 AND 4.6% IN 2017

The average inflation rate, targeted by the National Bank of Moldova for 2016, will make 6.3%, while in 2017 – 4.6%. The new forecast of the consumer price index and its short-term evolution was presented by NBM Governor Sergiu Cioclea and Deputy Governor Vladimir Munteanu at a press conference on Thursday.

Such rates of inflation mean that the market regulator has achieved the targeted goal of 5% ± 1.5%.

The NBM president said that the lowering of inflation is positively influencing on decline in interest rates on credits. Their average rate in 3Q2016 accounted for 12.89% in the national currency, falling by 0.71% against 2Q2016, while in convertible currency – by 6.16%, falling in the third quarter by 0.26%.

Interest rates on population deposits are also falling, reaching 10.98% in national currency in 3Q2016, which is 3.95% lower against 2Q, while in hard currency – 2.08%, falling 0.03% over July-September 2016.

The NBM president expressed regret about the fact that the base rate fell by slightly more than 10% this year, while the rate on credit to the real sector of economy – only by 2%.

Over this time, the NBM and the Finance Ministry managed to radically lower the yield rate on government securities, stabilizing it at the level of 9%, while at the beginning of 2016 it exceeded 25%.

As for the bad loans in the banking system, Cioclea concluded that this rate does not create obstacles for re-capitalization of Moldovan banks.

At the press conference it was said that if comparing the share of bad credits in Moldovan banks’ portfolios with the region’s countries, the situation in Moldova is better.

“In conditions of decline in crediting volumes, when there are few new credits, the rate of unfavorable credits are attracting additional attention”, said the bank president.

Talking about 40% of Moldova Agroindbank (MAIB) shares, put for sale, the NBM pointed the press’ attention to the fact that the amount of the entire package may attract attention and raise interest of portfolio financial investors. For this, they need their own assessment of the bank, which will take time.