NBM raises base rate again to combat rising inflation in Moldova
The National Bank of Moldova (NBM) raised the base rate by 0.9 percentage points, just under a month after it was previously increased by 2 percentage points.
The inflation rate accelerated in November and December, and it is expected to continue rising in the coming months. To counter this, NBM raised the base rate with the aim of making loans more expensive and curbing consumption, explains expert Veaceslav Ioniță.
According to Veaceslav Ioniță, the experience of 2022-2023 shows that when NBM raises the base rate, consumer loans increase in price first, followed by mortgages, and, to a much lesser degree, loans for businesses.
"Consumer loans are currently above 10 percent and are expected to rise to at least 11 to 11.5 percent," says Ioniță. "I have noticed that people have adapted to the new economic reality. Although loans are now more expensive than in 2021, when they were below 5 percent, people took out a record number of loans — nearly 210,000 loans in just one year. As a result, there will be a slight increase in loan costs," he explains.
According to NBM data, the base rate for the main monetary policy operations has been raised by 0.9 percentage points to 6.5 percent annually. Additionally, overnight credit rates have been set at 8.5 percent annually, repo operations at 6.75 percent annually, and overnight deposit rates at 4.5 percent annually.
It is worth noting that the last time the National Bank of Moldova raised the base rate was from 3.60 percent to 5.60 percent annually on January 10.
Translation by Iurie Tataru
