President Igor Dodon thinks the national currency should be devalued “a tad” to encourage exports and give the Moldovan economy a boost. “The National Bank isn’t acting correctly, because there are no reasons for prices to rise right now, as electricity and heating rates are in fact dropping,” the president said during the latest episode of his vlog.
“In Russia, when the crisis kicked in and all the economic problems started to pile up, the Russian ruble weakened. In Moldova, regretfully, the exchange rate dropped. I mean the Moldovan leu got stronger (in relation to the ruble). Why regretfully? Because this evaluation is detrimental to exports,” said President Dodon when asked why the Russian ruble is so weak in relation to the Moldovan leu.
Commenting on the president’s opinion, economist Adrian Lupușor said the idea would seem reasonable in conditions of a recession, a stable inflation climate and comfortable levels of foreign currency reserves. But the expert is concerned about the authoritative tone of these statements made by a president who is actively seeking reelection. Lupușor admits that the measure would be beneficial to exporters, but not to importers and the population at large, among other groups.
“Let’s not forget that the National Bank’s main goal is to maintain the stability of prices and not at all to manipulate the exchange rate. We have a floating rate, meaning the Moldovan leu floats depending on supply and demand, and the NBM intervenes only to temperate exaggerated swings. (...) Any attempt of political interference in this policy could lead to a macroeconomic disaster,” wrote Adrian Lupușor on FB.