February 16 (SeeNews) - Moldova's central bank decided to raise its policy rate to 10.5% from 8.5%, in order to temper the rise in consumer prices, it said.
Interest rates on overnight loans and deposits will increase by 2 percentage points - to 12.5% and 8.5% per annum, respectively, the central bank, BNM, said in a press release on Tuesday.
The level of required reserves remains unchanged.
The decision seeks to mitigate persistent inflationary pressures and create preconditions for bringing inflation back within the medium-term target range, including by anchoring inflation expectations and mitigating the side effects of increasing regulated tariffs, the central bank explained.
BNM also noted that its decision is aimed at moderating the growth of credit at the expense of increasing associated costs, stimulating savings at the expense of immediate consumption and reducing the pressure on the depreciation of the national currency due to the increasing current account and trade balance deficit, along with mitigating the dollarization effect of deposits.
Moldova's consumer prices rose 16.56% year-on-year in January, compared to an annual increase of 13.94% in the previous month, the latest data from the National Bureau of Statistics showed.
The central bank's executive board will hold its next meeting on monetary policy on March 15.
(1 euro = 20.1771 Moldovan lei)