The governor of the National Bank of Moldova (NBM) Octavian Armașu said that 2023 will be a year of recovery and restoration. According to him, the relaxation of the monetary conditions will create preconditions for restarting the economy, the decrease in the rate of inflation will bring the predictability and stability needed in economic activity, while the banking system is prepared to ensure financing for companies and the population. The outcomes were made public in connection with the presentation of the annual report for 2022, IPN reports.
In 2023, some of the important parts of the nonbank financial system will be transferred under the National Bank’s umbrella, such as the insurance companies and nonbank lending organizations. This will enable to ensure homogenous and consistent regulation and supervision throughout the financial sector.
According to the central bank, 2022 was overshadowed by the war in Ukraine, while at economic level by the consequences of this war that, intertwined with multiple internal and external shocks, made this year be very difficult from economic and monetary viewpoints. At the same time, the prompt and trenchant measures in the field of monetary policy taken by the National Bank enabled to overcome the inflation wave faced by Moldova and to direct inflation downward towards the end of the year.
At the beginning of last year, Moldova’s economy was under the impact of several events and shocks whose effects were still being propagated. The economy was recovering after the pandemic crisis. The prices of food products on the international market reached high levels. The prices of energy resources reached historic highs, while the rise in social payments fueled pro-inflation tendencies. In 2022, the series of shocks that fueled inflation continued with tariff adjustments and ended with the start of the war in Ukraine, which disrupted logistics chain and led to the replacement of Ukrainian products with more expensive products.
“The tightening of the monetary policy since the summer of 2021 while waiting for the inflation wave continued during most of 2022, being proportional to and matching price forecasts. This enabled us to reverse the price rise acceleration trend and at the end of the year to start the monetary policy relaxation cycle. In the absence of new external and internal shocks, the relaxation of the monetary policy will be continued for bringing the rate of inflation inside the corridor and creating favorable conditions for restarting the country’s economy,” said the governor.
Octavian Armașu noted that the banking system reform done during the last few years ensured a high level of resilience of the sector, enabling this to pass this difficult year without being significantly affected. The stability of the banking system was more important at the initial stage of the war, when the banks coped with a considerable amount of deposit withdrawals and ensured the servicing of payments for the flow of Ukrainian refugees. The banking system remains available for ensuring growth financing at the start of the next economic cycle.
The official reserve assets of the National Bank of Moldova continued to grow during the year, reaching US$4.5 billion. This volume ensures a sufficient and comfortable level for covering international commercial operations and protection against shocks so as to enhance the resilience and stability of the national currency.