OREANDA-NEWS. January 05, 2015. The balance of inflationary risks during the next period will remain influenced by external and internal factors, with inflationary ones prevailing, a press release of the National Bank of Moldova runs.

In particular, a growing probability of the recessions in the economies of Europe and Russia - Moldova's major trade partners - poses a bigger risk to FX incomes Moldova's population and exporters receive through the channels of external trade and remittances. This, in its turn, can spur fluctuations in MDL’s exchange rates and, in future, inflation rates.

The escalating geopolitical tensions in the region may give birth to an additional inflationary pressure, NBM emphasizes. As the national currency has devaluated more than it was expected in 2012, when rates on regulated services (gas, power, water supply, etc) were budgeted, there has been a risk that the regulated services rates will be revised up in 2015, stirring inflationary expectations, NBM says.

Next year the inflation rate may speed up amidst spreading secondary effects of the revision. According to NBM, more pronounced inflationary risks require that preventive measures be included in the monetary policy to address the challenge. Under current conditions, the monetary policy should be gradually toughened to address the inflationary pressure exerted by the regulated prices and the cheapening national currency.