What amount will the CCyB “free up”?
In simple terms, this means that banks must review their risks on loans issued according to a specific formula and increase their own funds to cover possible losses. This means that each bank must withdraw certain amounts from “circulation” (which could be invested in the economy in the form of loans, for example) and these funds must be classified as “own” funds, roughly speaking — as reserves (and this money cannot be spent).
To understand how much will be “withdrawn from the Moldovan economy” across the entire banking system, it is necessary to know the situation in each bank, as a specific calculation formula based on a very long series of indicators is applied. According to rough estimates by InfoMarket agency, the matter concerns a sum of approximately 2.5-3 billion lei.
This requirement must be met by May 13, 2026, six months after the publication of the relevant NBM decision in Monitorul Oficial/the Official Journal of Moldova (November 13, 2015).
It is interesting to note that on July 24, 2025, by the NBM decision, the countercyclical capital buffer rate, which had previously been 0%, was increased to 0.5% until the end of January 2026 (six months after the publication of the NBM decision). In other words, with its decision, the regulator has already “withdrawn” another 1 billion lei from the economy into commercial bank reserves.
In making its latest decision to raise the CCyB, the regulator justified this by the fact that in the first quarter of 2025, the ratio of loans granted to the private sector to seasonally adjusted quarterly GDP reached 103.0% (25.74% in relation to annual GDP), exceeding its long-term trend by 7.8%. As noted by the NBM, this dynamic was mainly due to a sharp increase in lending. A countercyclical buffer is an additional capital requirement applied to banks during periods of rapid credit growth. Its purpose is to increase the stability of the banking sector and prevent the accumulation of excessive risks in the financial system. The countercyclical buffer rate for Moldova is reviewed quarterly.
But is the growth of the CCyB really due to the reasons cited by the regulator?
The missing piece of the puzzle
The National Bank’s decisions to increase the CCyB rate are only part of a broader picture of actions that have a specific goal and pursue specific consequences.
On November 6, 2025 the National Bank lowered the mandatory reserve requirements by 2 percentage points for funds attracted in non-convertible currency (primarily Moldovan lei/MDL) – from 22% to 20% of the calculation base; and in freely convertible currency – from 31% to 29%. When it comes to different currencies, in order to obtain comparable data, the indicators are expressed in the national currency. As of October 31, 2025, all 10 Moldovan commercial banks attracted deposits totaling 139.4 billion lei (both in lei and in currency converted into lei). Thus, on the date when the NBM’s decision to lower the mandatory reserve requirements should be reflected in the banks’ balance sheets—December 15, 2025—2% of the total amount of deposits, or 2.8 billion lei, will be injected into the economy (for lending). But will it really be injected into the economy?
Another piece of news in the chain of events is the consequences. The International Monetary Fund, whose program ended in October 2025, refused to provide Moldova with the last tranche of $170 million (about 2.9 billion lei). According to the memorandum, these funds were supposed to go to Moldova’s state budget. Yes, it is a loan, but the interest rate on it is only 2.5% per annum (the so-called technical rate, covering the costs of servicing the loan). Let’s remember that the cost of this loan is 2.5% per annum.
To complete the puzzle, let’s turn our attention to the market of government securities (GS). No matter how much the Ministry of Finance would like to diversify the portfolio of government securities in terms of maturity, investors prefer to purchase securities with maturities of 182 days and 364 days – semi-annual and annual. According to data for the first half of 2025, 182-day T-bills account for 29.5% of all GS issued on the primary market, and 364-day T-bills account for 61.4%. In total, this represents 90.9% of all primary placement securities.
For comparison: for the first half of last year, 2024, the figures are as follows: 182-day T-bills – 25.6%; 364-day T-bills – 64.3%; their total share is 89.9% of all securities issued on the primary market (through auctions). In other words, the situation has not changed much over the year, although in 2025 investors began to pay slightly more attention to six-month securities, preferring them to annual ones. This suggests that T-bills buyers have become slightly less confident in annual securities, preferring shorter terms. In addition, interest rates on these two types of securities have not differed significantly in recent months and are slightly above 9% per annum. At the last auction on November 18, the rate on 182-day T-bills was 9.43% per annum, and on 364-day T-bills, 9.32% per annum.
Over the 10 months of 2025, the volume of all types of government securities placed on the primary market increased by 5.71 billion lei (+18.9%) – from 30.24 billion lei on January 1 to 35.95 billion lei on October 31. The share of securities sold directly to individuals increased slightly (from 0.23 billion to 0.68 billion lei). This is despite the fact that, according to the State Budget Law with all the latest amendments, at the end of the year, the Ministry of Finance must allocate 8.44 billion lei to the budget through the primary placement of government securities (2.73 billion must be collected in November-December, and supply exceeds demand). In other words, a third of the amount allocated for the whole year must be collected in two months.
The Ministry of Finance data show that in the first half of 2025, investor demand (mainly from banks) exceeded supply; there were more buyers than the volume of securities offered. The situation changed in July, when the supply of government securities exceeded demand. This was a sign that banks were running out of funds that they could invest in government securities. Apparently, the forecasts of the National Bank and the Ministry of Finance were pessimistic in this regard: if banks do not have free funds for government securities, the Ministry of Finance will not be able to sell the volume of securities stipulated by the State Budget Law. And, apparently, the National Bank found a solution: on July 24, it raised the CCyB rate from 0% to 0,5%, thereby providing banks with “liquidity” to purchase government securities.
As noted above, this decision “freed up” about 1 billion lei. However, the Ministry of Finance’s “shortfall” from the sale of government securities continues today, especially in September and October. Therefore, the following decisions were adopted by the National Bank on November 6: a 2% reduction in mandatory reserve requirements and another increase in the CCyB rate to 1.5%. The NBM released about 6.5 billion lei for banks, which will most likely be directed to the government securities market. The Ministry of Finance must comply with the State Budget Law and replenish the state treasury by the end of the year with 8.44 billion lei at the expense of government securities.
Complex relations with the IMF
And how much will the volume of government securities sales on primary markets increase in 2026, considering that all of the above is the result of consequences of other events?
The consequences of the “premature” closure of the IMF program, which resulted in Moldova losing $170 million (2.9 billion lei). As noted above, the program formally closed on schedule, but it was not completed. In order for the country to receive the last tranche, an IMF assessment mission had to visit Moldova to evaluate the country’s performance in the previous stages of the memorandum with the Fund and grant the green light for the allocation of the remaining funds. What happened? Let’s just say that the IMF assessment mission did not visit Moldova in 2025. There was only a short visit in March. There is only one conclusion to draw: Moldova violated the terms of the memorandum to such an extent that the Fund did not even consider it necessary to send an assessment mission. It seems that the decision to terminate the program ahead of schedule was made back in early 2025, but it was not announced because the country was on the verge of parliamentary elections…
While answering journalists’ questions about the IMF not allocating the planned $170 million to Moldova, the NBM Governor Anca Dragu noted that the country has sufficient funds (including from the European Union and bilateral partners) and there is no need to worry about the amount not received from the Fund.
Well, maybe there are enough funds for now. Until the end of the year. But the regulator’s decisions, as well as the lack of even a draft budget for 2026 in the public domain, suggest something completely different.
Why is the draft law on the state budget for 2026 not being published? The document was definitely ready before the parliamentary elections. In a non-election year, it is published in August-September for public consultations.
Perhaps it is a matter of relations with the IMF? Not only has our program with the Fund ended, it ended ahead of schedule and the country did not receive the last tranche. And, as we know, the existence of a program with the International Monetary Fund is the main indicator for foreign and international investors, both institutional and private, of whether it is possible to work in a given country. Investors interpret the absence of a memorandum with the IMF as a high risk, and for most institutional investors, it is simply a sign that “entry is prohibited.”
In December, Chisinau is expecting a visit of a mission from Washington. This will not be an assessment mission—it is impossible to assess the progress of a program that has been completed. Nor will it be a so-called short staff-visit, as in March 2025. The official name of this visit will be announced the day before.
As InfoMarket has learned, the discussions will most likely focus on whether Moldova will agree to sign a new memorandum or not. At the same time, it will probably be necessary to eliminate the reasons why the previous memorandum was terminated. And the populist issue of raising, or rather not raising, salaries (in the absence of money in the budget) will not be the most important item on the general list.
The Ministry of Finance and the National Bank are preparing for a scenario without a memorandum (and external financing, including a budget deficit), at least until the middle of next year. That is why the National Bank by its decisions is releasing approximately 6.5 billion lei “to commercial banks for management”. As noted above, the decision to reduce mandatory reserve requirements returns 2.8 billion lei to banks; decisions to increase the countercyclical capital buffer (in June and November) mean that banks “reserve” 3-3.5 billion lei. It should be clarified here that “reserving” this money means that it must be as liquid as possible; and investments in government securities are (and are recognized by the National Bank as) highly liquid, equivalent to funds in accounts.
Commercial banks will not keep money that they are forced to “reserve” at the CCyB rate in their accounts as dead weight when it can be invested in government securities (this is almost 1 billion lei by January and another 2.5-3 billion lei by May 2026). Not counting the 2.8 billion lei that will be released in December 2025 from the mandatory reserve requirements.
Given a number of circumstances, commercial banks have certainly been “explained” where they should direct the 6.5 billion lei that the National Bank has “allocated” to them by its decisions. At the same time, the government securities market is experiencing a shortage of investors. Auctions in recent months have fallen short of attracting investor funds, meaning that supply exceeds demand at very attractive rates above 9% per annum. Banks would be happy to purchase more government securities, but the lending market has grown significantly in recent years and bank liquidity has decreased; as noted by the NBM Governor, it has fallen below 1 billion lei. (For example, before the pandemic, the increased liquidity of the banking sector exceeded 10 billion lei – banks simply did not know where to invest their money). The Ministry of Finance needs to sell government securities to finance the budget deficit (and redeem previously issued securities on time). And banks, the main investors in government securities, no longer have any free money.
The amount of 6.5 billion lei adds up: the Ministry of Finance holds auctions for the sale of 182-day and 364-day government securities twice a month, offering 1.1-1.55 billion lei for each position. That is, two auctions for each type of security, which comes to about 6 billion per month. Currently, the Ministry of Finance is falling slightly short, and what it does sell is quite expensive for it. Apparently, it is expected that with the appearance of new “earmarked money” in commercial banks, all volumes put up for auction will be sold. In addition, the Ministry of Finance probably hopes that by ensuring liquidity and increasing demand for securities, rates on them will fall.
In the current circumstances, everyone wins:
- The National Bank returns 2.8 billion lei from mandatory reserves to commercial banks, for which it pays interest, albeit not much, when the funds are in NBM accounts.
- Commercial banks – they redirect these funds to the T-bills market, where they will receive a higher interest rate than if they were held in accounts with the National Bank.
- The Ministry of Finance – because it solves the problem of replenishing the state budget, or rather, closing its deficit through the sale of GS.
The only loser is the Moldovan economy. This money is not intended for its development.
In this situation, it is obvious that the matter concerns solving immediate problems, and there is no question of Moldova’s economic development (at least in the medium term) or any state investment in the real sector of the economy. There is no point in harbouring any illusions about the €1.9 billion expected from the European Union, which is supposed to be directed towards investment projects: this money is earmarked and all programs for it have already been planned for two years.)
So it turns out that in the absence of a memorandum with the IMF, and, at a minimum, in conditions of limited external financial support, with a huge budget deficit, as in 2025, and certainly in 2026, the country intends and is already prepared to hold out for at least six months. And if no agreement is reached with the IMF, it must be understood that the Ministry of Finance has no other source of financing for the budget deficit other than the sale of government securities. We still remember how in 2022 the average annual rate on securities reached 17-18% per annum, and this yield was paid to investors (i.e., commercial banks) from the state budget.
If circumstances take a turn for the worse, in 2026 Moldova will have to tighten its belt, sharply increase the volume of government securities issued, and lure investors with higher rates in order to patch up the budget which means “robbing Peter to pay Paul.”
CCyB — Countercyclical Capital Buffer
//24.11.2025 — InfoMarket.
