Russian services downturn deepens as demand weakens and confidence hits three-and-a-half-year low
2 hours ago
The National Bank of Moldova (BNM) cut its monetary policy rate by one percentage point to 5% at its December meeting, aiming to stimulate economic growth amid disinflationary pressures, the central bank said. The board also set the interest rate for repo operations at 5.25%.
The decision comes as headline inflation remained broadly unchanged at 6.99% y/y in November, the same level recorded in October. Inflation remains above the upper bound of the target range of 5.0% ±1.5 percentage points.
The National Bank said the rate cut is intended to stimulate aggregate demand, including by encouraging consumption and investment, while supporting macroeconomic balance and anchoring inflation expectations.
“The reduction in the base rate will act through the interest rate channel, taking into account the time lags associated with the transmission mechanism, and will have a downward influence on interest rates on the monetary, deposit and credit markets,” the bank said.
Recent macroeconomic data broadly confirm the assumptions set out in the Inflation Report published in November 2025, the central bank added. That forecast indicates inflation will return to within the target range in December and remain in the lower part of the range from the first quarter of 2026 until the end of the projection horizon.
According to the National Bank, the evolution of inflation in November validated the main forecast assumptions. The structure of annual inflation continued to be driven mainly by regulated prices and food products, while aggregate demand maintained a disinflationary influence during the reference period.
The central bank said the easing decision reflects a balance between supporting economic activity and maintaining price stability, given current conditions of subdued demand. Policymakers reiterated that monetary policy will remain data-dependent and that future decisions will take into account inflation dynamics, risks to the outlook and the transmission of previous measures.
The National Bank said that it will continue to monitor domestic and external developments closely as inflation is expected to ease into the target range over the coming months.
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