NBM TO BRING INFLATION RATE IN TARGETED CORRIDOR IN 1Q2018

The level of inflation will come back to the corridor of ± 1.5% from the targeted rate of 5% in the first quarter of 2018, says the decision of the National Bank of Moldova Executive Committee, which lowered the base rate to 7^ from 7.5% on Wednesday.

According to the NBM decision, the consumer price index will be preserved within the inflation corridor two quarters in a row. The NBM confirmed the mitigation of the mid-term inflation pressure, which was mostly due to the slowdown iof economic activity.

The regulator says that the decision on lowering the base rate by 0.5% was taken on the basis of the latter macroeconomic analysis and supposition, connected with the new mid-term forecast of the inflation level.

According to the current forecast and in the contest of supporting internal and external macroeconomic conditions, the annual level of inflation will be quickly falling starting from 4Q2017.

“Starting from 3Q2018 and in the following three quarters, the annual inflation will be lower than the inferior limit of the corridor”, the NBM message says.

In the same context and in absence of vivid deviation from factors and suppositions, on which the current forecast is based, the NBM will continue the policy of lowering the base rate in the coming several months.

The next sitting of the NBM Executive Committee on monetary policy will take place on November 29, 2017.

Infotag’s dossier: Besides the base rate, the NBM has also lowered 0.5% the rates on overnight credits and deposits – to 10% and 4%, respectively.