Remarks by the President of NBM Dorin Dregutsanu at a press conference "The new strategy of monetary policy"

Remarks by the President of NBM Dorin Dregutsanu at a press conference "The new strategy of monetary policy"

Strategy of monetary policy for the period 2010 - 2012 years.

Curbing inflation

In accordance with the Law on the National Bank of Moldova, the main objective of the NBM is to ensure and maintain price stability.

Price stability can be defined as a condition in which prices fairly low and not significantly affected, or rather does not adversely affect the economic problems of society. There is a growing consensus in the world regarding the role of price stability to achieve a lasting and healthy economic growth. At the same time, inflation has, among other things, the negative effect on living standards, mainly through loss of income and purchasing power.

Providing and maintaining price stability provides a package of measures undertaken by the NBM in order to create an economic environment after the inflationary processes occurring in the country.

The strategy of monetary policy in the period 2010 - 2012 informs the general public about the key components of fashion promotion and maintenance of the NBM of price stability.

The strategy is designed based on the following 3 principles:

clear strategy;

confidence in the NBM and

transparency.

Clear strategy

To improve the clarity of the Strategy, the latter including the interpretation of goals, explains the regime of monetary policy, monetary policy instruments and mechanisms for its implementation. The strategy covers a period of time, the purpose of the NBM is a medium-term price stability, ie inflation (measured by the consumer price index published by the National Bureau of Statistics) shall be maintained at 5% per annum ± one percentage point in 2010 and will correspond to the average interval expressed in one figure in the period 2011-2012.

Decisions of the NBM monetary policy will be based on the macroeconomic forecast, which means that regardless of what level of inflation now, NBM purposeful for the future and resolve to support inflation in the prescribed range over the medium term.

Confidence in the NBM

Economy of the Republic of Moldova is a characteristic of any developing economy. This predominance of shocks on the supply side, the fragility of the fiscal authorities, an undeveloped financial market (using less sophisticated tools), sensitivity to capital inflows (especially a sharp cessation of capital inflows) and the migration of labor (including, depending on volume of transfers from abroad). In addition, there are several other eksogennyh factors (beyond the control of the NBM), as an administrative change in prices, taxes and fees and the cost of imports (mainly fuel resources), which reduce the effectiveness of measures taken by the NBM to keep inflation low.

But again, the NBM will take all necessary measures to achieve the stated objectives. Perhaps, during 2010-2012. inflation over the last 12 months exceeds the temporary interval. This can not be interpreted as a failure of the NBM. Actions of the NBM should be interpreted and assessed over the medium term, rather than a specific date.

Transparency

The main objective of the NBM, while ensuring and maintaining price stability is a high responsibility to the general public.

To ensure transparency in respect of decisions taken in the field of monetary policy and the results of the measures undertaken, the NBM has published on its official web page schedule of monthly meetings of the Governing Board of the NBM on monetary policy (the last Thursday of each month). Decisions in the field of monetary policy shall be published no later than the second day after the meeting of the Governing Body.

Each month, immediately after the publication of the consumer price index by the National Bureau of Statistics, the central bank publishes an informational message containing an analysis of the determinants of inflation with an estimate of projected inflation.

Also, a quarterly report will be published on monetary policy, which will include an analysis of the macroeconomic situation and the medium-term forecast (for 2 years), inflation, and macroeconomic fundamentals.

NBM will have a continuous dialogue with the press and economic analysts about inflationary processes occurring in the Republic of Moldova.

We are confident that these three strategic principles (clarity, credibility and transparency of the NBM) will contribute to a better understanding of the population of decision-making in the field of monetary policy.

NBM will work closely with the central public authorities with a view to ensuring and maintaining price stability and creating favorable conditions for long-term economic growth and improving living standards.

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