- Decision
- Lower
- Rate change
- 25 bps
- base rate
- 6.25%
The Executive Board of the National Bank of Moldova cut the base rate on short-term operations by 25 bp to 6.25% on 7 August 2025, lowering the overnight loan, repo and overnight deposit rates to 8.25%, 6.50% and 4.25% respectively, and keeping reserve requirements at 22% on MDL/non-convertible and 31% on convertible FX funds, as it judged the disinflation trend and its latest projections warranted a shift from a completed restrictive cycle to policy easing aimed at supporting aggregate demand while keeping inflation centred on the 5% ±1.5 ppt target range. The cut partially reverses February’s 90 bp hike that had lifted the base rate to 6.50%, which the central bank then held unchanged in May and June. Annual CPI slowed to 8.2% in June from 8.8% in March and is projected to re-enter the target band by December before averaging 7.7% in 2025 and 3.9% in 2026 amid disinflationary demand, though regulated tariff increases and weak agricultural output remain near-term headwinds; lending growth has already cooled following earlier rate rises. Externally, global activity has softened on trade frictions, the war in Ukraine and Middle-East tensions, with oil rebounding on risks to the Strait of Hormuz and international food and European gas prices climbing. The central bank will keep monitoring domestic and external conditions and signalled that further moves will hinge on updated forecasts, with the August Inflation Report due on 14 August and the next policy meeting set for 18 September 2025.
Rate evolution
The National Bank of Moldova moved from a June 2025 hold into a 150 basis point easing cycle through December, paused at 5.00% in early 2026, and then reversed course with increases of 150 basis points in May, 50 basis points on 18 June, 50 basis points on 6 August and 150 basis points on 17 September 2026, taking the base rate applied to the main short-term monetary policy operations to 9.00%. The earlier cuts reflected moderating inflation, transmission of previous restrictive measures and disinflationary aggregate demand, while reserve-ratio reductions sought to lower credit costs and support demand.
Statements initially described risks as broadly balanced with a disinflationary bias, but by May 2026 the balance had turned inflationary as the Middle East conflict raised energy, food and raw-material prices. The June increase responded to intensifying supply pressures, stronger domestic demand and inflation above the target range, while the August move addressed consumer demand and persistent supply shocks. On 17 September, the Bank maintained a restrictive stance as adverse international energy, food and raw-material prices intensified supply pressures and household disposable income supported domestic demand. Annual inflation rose to 6.96% in August, above the upper bound of the range around the 5.0% medium-term target, while the Bank revised its inflation projection down for the third quarter of 2026 and up for the fourth quarter of 2026 and the first half of 2027 relative to its August forecast.