​NBM APPLIES MONETARY POLICY INSTRUMENTS TO LOWER INFLATION PRESSURE - OCTAVIAN ARMASU

The National Bank of Moldova (NBM) is tracking and forecasting internal and external macroeconomic events and risks connected with the development of inflation in short-term and mid-term perspectives, thus fulfilling their legal mandate - ensuring and supporting the price stability.

In an interview to press, NBM President Octavian Armasu informed about the instruments the regulator will be applying next year for mitigating the inflation pressure, given that 10.07 billion lei in the 2020 State Budget account for foreign grants and credits.

"For ensuring and supporting the price stability, the central bank implements the regime of direct targeting of inflation in accordance with the NBM monetary policy strategy in short-term perspective", he said.

According to Armasu, in the document the target rate of inflation, calculated on the basis of the consumption price index, accounts for 5% per year with possible deviation of В± 1.5%.

"The goal is achieved by means of the main monetary policy instrument - operations on the open market. At the same time, the NBM is using additional instruments of monetary policy, such as permanent funds, mandatory reserve rate and currency market interventions", Armasu said.

He explained that four quarter forecasts of inflation within monetary policy are compiled during a year.

"On the basis of the inflation forecasts, the NBM Executive Committee is taking decisions on monetary policy they are publishing as of the day of adoption. Between these rounds there are four more sittings of the NBM Committee on promoting the monetary policy", Armasu said.