National Bank of Moldova lowers refinancing rate to 6.25%, brings restrictive monetary policy cycle to an end
CHISINAU. Aug 7 (Interfax) - The National Bank of Moldova has lowered the refinancing rate 25 basis points to 6.25% per annum, bringing its restrictive monetary policy cycle to an end, the NBM said.
The NBM held the rate on March 20, May 12 and June 19 after raising it twice, by 2.9 percentage points in total, at meetings on January 13 and February 5.
The NBM also lowered the overnight lending rate 25 bps to 8.25% per annum, the REPO rate to 6.50% per annum and the overnight deposit rate at to 4.25% per annum. It also maintained the reserve requirement ratio for attracted funds in the national currency at 22% and for funds attracted in foreign currency at 31%.
"The restrictive monetary policy cycle has ended. The National Bank continues to focus on stimulating aggregate demand, including by stimulating consumption and investment, balancing the national economy and the current account, as well as anchoring inflation expectations, taking into account time lags in the transmission of monetary policy through the interest rate channel," the NBM said.
With this decision, the National Bank of Moldova aims to keep inflation within ± 1.5 percentage points of the 5% inflation target over the medium term, considering this to be the best level for economic growth in Moldova.
The decision to resume monetary easing is based on the confirmation of the National Bank's latest forecast and the associated disinflationary trend. "The results will be transmitted gradually through a reduction in interest rates in the money, deposit and credit markets," the regulator said.
The regulator said annual inflation in June 2025 was 8.2%, down from 8.8% in March 2025. Although inflation is still above the upper bound of the ± 1.5 percentage point deviation from the 5% inflation target, it fell to 7.9% in the second quarter from 8.8% in the first quarter.
The National Bank's current forecast is for annual inflation to trend down by the end of this year and in the first half of next year. According to the updated forecast, average annual inflation will be 7.7% compared to a previously expected 7.3% in 2025, and 3.9% versus 4.7% in 2026. Inflation is supposed to return to the target range from the first quarter of 2026.
But the NBM said inflation risks persisted due to the increase in energy tariffs at the end of 2024, as well as a drop in agricultural output due to poor weather. External risks include tension in the region and the Middle East, the fragmentation of international trade and the slowdown in economic growth in the European Union.
The NBM's next rate-setting meeting takes place on September 18.
Following the halt of Russian gas supplies to Transdniestria, from which right-bank Moldova imported low-cost electricity, Chisinau was forced to rapidly increase imports of more expensive electricity from Romania, leading to a sharp rise in domestic tariffs. At the beginning of the year, the NBM significantly raised the key interest rate in an effort to minimize the inflationary impact of rising energy prices, after inflation increased from 4.2% to 7% in 2024.
The NBM decreased the rate from 4.75% to 3.6% over several stages in 2024, but this downward trend ended in September amid anticipation of an energy crisis.
