Moldova's central bank, BNM, said on Wednesday it will maintain its key rate at 9.0%, striving to keep inflation close to its 5.0% target.
"This decision is aimed at anchoring inflation expectations in the context of restoring and maintaining the inflation rate close to the target of 5.0% in the medium term, with a possible deviation of plus or minus 1.5 percentage points," BNM said in a statement.
By keeping the rate on hold, BNM aims to promote a monetary climate conducive to reviving lending and savings and to help domestic economic environment adapt to market volatility related to the external macroeconomic situation, it added.
The monetary policy stance depends on the risks and uncertainties associated with internal and external developments, BNM said. External risks are associated with the increase of international food prices along with uncertainty related to higher international oil price.
The main internal risks and uncertainties arise from the modification of excise duties, the fiscal deficit, as well as the quality of Moldova's 2017 harvest, the central bank said.
Moldova’s agricultural output increased by 18.6% last year, data from the country's statistical office showed.
Consumer price inflation accelerated to 6.6% year-on-year in April, from 5.1% in March
The central bank projects 8.1% inflation in Moldova in 2017 and 4.1% in 2018.
On Wednesday, BNM also decided to keep interest rates on overnight loans and deposits at 12% and 6%, respectively.
The central bank also kept the required reserves for deposits in freely convertible currency at 14% and the required reserves for deposits in Moldovan and other non-convertible currency at the current level of 40%.
"In order to support the proper functioning of the interbank money market, the BNM will continue to manage firmly the excess liquidity through sterilization operations, as scheduled," the central bank said.
BNM last revised its key monetary rate in October, lowering it by 0.5%, to 9.0%.
By See News.