MOLDOVAN LEU EXCHANGE RATE ON MARKET DEPENDS ON REGULATOR INTERVENTIONS

The stability of the Moldovan leu rate on the market at the beginning of the year depends on regulator's interventions, in absence of whose currency buying the strend of Moldovan leu rate strengthening is accelerating.

"Currency rate self-regulation at the expense of demand and supply without presence of buyers of euros and dollars is not enough because the inflow of currency to the country exceeds the demand for it inside the country", currency dealers say.

Capital market professional participants say that year to date NBM dealers have not come to the market with proposals on buying dollars or euros and thus the demand for these is much smaller than the volume of currency proposals for selling.

At the question if there is panic on the market because the national currency exchange rate relatively easily crossed the threshold of MDL17 : US$1, a bank dealer said: "There is no panic, because market participants witnessed a similar situation in early 2017".

"There are no great worries, but there are clear prerequisites that the exchange rate sustainably going down and we see no reasons for its stopping", the Infotag interviewee said, pointing that the established reason of Moldovan leu strengthening is connected with the strengthening of the position of the Euro against the US dollar on international markets.

According to him, the situation with the Moldovan leu rate will depend on how the NBM behave: if it will be buying surpluses of foreign currency on the market to prevent the further strengthening of the national currency.

"We have to recognize that the Moldovan currency market is wave-like: either everyone is buying currency, or everyone is selling it, which affects the exchange rate establishing", the dealer said.

At the question where is the threshold that the Moldovan leu can break through this year, market participants say they see this threshold at the level of MDL15 : US$1.

Also, market participants regard the situation in economy, the development of which cannot be urged forward by real and efficient reforms, as an argument that witnesses how the excess of currency is pressing on the Moldovan leu rate, strengthening its correlation against the US dollar.

"The easiest way to do this is to raise the level of salaries in the budget sphere and to relieve the pressure and various restrictions on businesses", the interlocutor said.

He supposed that in 2018 with the help of national currency exchange rate the authorities will try to restrain the growth of prices on the imported energy resources, aiming thus to prevent the raising of heating and electricity tariffs for household users, which is so important in the election year.

Infotag's dossier: For Thursday, January 18, the NBM established the following exchange rates of the Moldovan leu: MDL16.9304 : US$1 and MDL20.6695 : Euro1, strengthening the Moldovan leu against the US dollar and depreciating it against the single European currency.