By CentralBankNews.info
Moldova’s central bank left its basic interest rate at 9.0 percent and while it raised its forecast for inflation, it added economic data showed “mixed signals” for the first two months of the fourth quarter of 2016.
The National Bank of Moldova (NBM) cut its rate by 1,050 basis points in 2016, most recently in October, as it slowly unwound past rate hikes totaling 1,600 points from December 2014 to August 2015 following a plunge in the leu’s exchange rate and accelerating inflation.
In an update to its inflation report, which will be presented on Feb. 1, the central bank raised its 2017 inflation forecast to 5.2 percent from 4.6 percent, saying inflation is expected to trend upward until the third quarter of this year.
Inflation in 2018 is also forecast to average 5.2 percent but still remain within the central bank’s target range of 5.0 percent, plus/minus 1.5 percentage points.
In December Moldova’s headline inflation rate eased to 2.4 percent from 2.6 percent in November, below the BNM’s lower limit. Core inflation, however, rose to 4.5 percent in December from 2.6 percent.
Moldova’s economy rebounded last year following 2015’s recession with Gross Domestic Product in the third quarter growing by an annual rate of 6.3 percent, up from 1.8 percent in the second.
In October-November, exports rose by 18.4 percent from the same 2015 period, imports were up by 9.3 percent and industrial output up by 0.9 percent.
At the same time, the volume of goods transported declined by 0.8 percent, retail turnover dropped 1.6 percent and trade in services was down 1.3 percent, the central bank said.
Consumer demand in the same two months grew by an annual 9.6 percent, up 4.1 points from the third quarter of last year.
Moldova’s leu plunged from August 2014 until January last year and since then it has been more stable. The leu was trading at 19.92 to the U.S. dollar today, down 0.3 percent this year and down 35 percent since the start of 2014.
Moldova holds rate, raises 2017 inflation forecast
January 27, 2017
