The completed IMF Mission urges the NBM to closely monitor the price dynamics and be ready to adjust the monetary policy instruments accordingly.
Since August, the prime rate has been lowered by 150 basis points due to the decline in inflation, and in November the reserve requirements were also lowered. However, the recent rise in core inflation and continued economic recovery create preconditions for the growth of inflationary pressure, the Fund’s experts conclude.
Still high reserve requirements (20% for deposits in Moldovan lei and 29% for deposits in foreign currency) restrain monetary transmission and do not lead to cheaper lending. The IMF recommends a gradual return to normal reserve requirements, which should continue after inflation risks have clearly abated.
Maintaining exchange rate flexibility while maintaining adequate levels of foreign exchange reserves will be critical to weathering potential shocks. And continued strong credit growth due to rising house prices requires close monitoring, the IMF said.
Banks are sufficiently capitalized and able to withstand the pressure, but strong credit growth has prompted the central bank to take precautionary measures and raise the countercyclical capital buffer rate. After all, house prices have risen 24% since the end of 2024. And further strengthening borrower screening measures and aligning the government’s Prima Casa program with existing screening measures will help contain risks.
