OREANDA-NEWS. August 01, 2011. This decision was taken by the NBM Administrative Board given the evaluation of the macroeconomic situation in the country, medium-term tendencies and forecasts of macroeconomic indicators, including the medium-term inflation projection from the point of view of possible risks. The NBM Administrative Board also increased the overnight credit rates by 1 percentage points – to 12% from 11%, and on overnight deposits – to 6% from 5%.

The compulsory reserves on funds in MDL and currency attracted by banks remained unchanged – 14%. According to the NBM, the decision to raise the interest rate to 9 percent p.a. was taken due to the forecasted further inflationary pressure. This decision aims to moderate the inflationary expectations in connection with the growth of consumption of households resulting from the increase in population’s disposable incomes from salaries, remittances from abroad and social payments, and to continue to encourage economy along with increasing citizens’ savings. It is planned that the inflation evolution in the near future will depend both on internal risk factors, such as regulated prices (including secondary effects) and foreign risk factors, such as instability on global financial markets caused by the public finance crisis in Europe and by the dynamics of global prices for foodstuffs and oil products.

The NBM stated it would continue constant monitoring of macroeconomic indicators and situation on the monetary, foreign exchange and credit markets and will quickly react at all internal and external challenges. The next meeting of the NBM Administrative Board will be held on August 25. The last time the refinancing rate was increased was in late December 2010 - from to 8% from 7%.