NBM Raises Base Rate by 1.5 Percentage Points to 9%

The National Bank of Moldova is tightening monetary policy, raising its base rate by 1.5 percentage points to 9% per year in an effort to contain inflationary pressures that have intensified in recent months. The decision was made by the NBM Executive Committee, which also set the overnight lending rate at 11%, the repo rate at 9.25% per year, and the overnight deposit rate at 7% per year, bani.md reports. At the same time, reserve requirement ratios have been kept at their current levels: 18% for funds attracted in Moldovan lei and non-convertible foreign currencies, and 26% for funds in freely convertible currencies. The NBM says its restrictive monetary policy is being maintained amid stronger inflationary pressures stemming both from the supply side, due to rising energy, food and raw material prices on international markets, and from domestic demand, which is being supported by rising disposable household incomes. With this decision, the central bank aims to reduce inflationary pressures, mitigate the secondary effects of supply shocks, encourage saving over consumption, and bring inflation back within the ±1.5 percentage-point variation range around the 5% target. Annual inflation reached 6.96% in August, up 0.62 percentage points from July and above the upper limit of the NBM’s target range. At the same time, inflation dynamics were weaker than forecast by the central bank in its August 2026 Inflation Report. The NBM attributes the difference primarily to the postponement of the natural gas tariff adjustment, which temporarily contained the increase in regulated prices. External risks remain high. The NBM points to geopolitical uncertainty, volatility in energy markets and moderate economic growth prospects in the euro area. At the same time, average annual inflation in the euro area is expected to remain above the European Central Bank’s target, while the ECB decided to raise its key interest rates by 25 basis points effective September 16, 2026. Pressure is also coming from energy markets. Since the beginning of September, Brent crude and Dutch TTF gas prices have risen amid the resumption of hostilities between the United States and Iran, raising concerns that global inflation could remain elevated. The NBM says it will continue monitoring domestic and external developments, while future monetary policy decisions will depend on updated inflation forecasts.