The base rate applied to the main short-term monetary policy operations has increased by 2 percentage points, from 3.60% annually to 5.60%. The decision to raise the rate was made by the Executive Committee of the National Bank of Moldova, based on the energy crisis, IPN reports.

According to a press release from the National Bank, the Executive Committee of BNM decided to increase the overnight credit rate to 7.60% annually, the repo operations rate to 5.85%, and the overnight deposits rate to 3.60%.

According to BNM, the increase in the base rate is aimed at mitigating the secondary effects of regulated tariff changes on inflation and anchoring inflation expectations, with the goal of bringing the annual consumer price inflation rate back within the target range in a reasonable time frame.

“The BNM decision took into account recent macroeconomic developments both externally and internally, including the outlook for accelerating inflation due to the increase in domestic tariffs for gas, thermal energy, and electricity, adjusted in December 2024 and January 2025”, BNM stated.

Annual inflation reached 6.97% in December 2024, which was 1.6 percentage points higher than the previous month's level and exceeded the upper limit of the target range of 5.0% ±1.5 percentage points. The annual inflation rate, excluding this increase, is approximately 6.3%, which is close to the target. Additionally, according to BNM, the external environment continues to indicate geopolitical tensions and inflationary pressures.

The base rate applied to the main short-term monetary policy operations was reduced to 3.6% annually in May 2024, and it remained at the same level until the end of 2024. Likewise, the interest rates on overnight credits remained from May to December 2024 at 5.6% annually, repo operations at 3.85%, and overnight deposits at 1.6% annually.