Moldova's c. bank cuts key rate to 3.60% to support economy

Moldova's central bank kept up with policy easing, lowering its key rate to 3.60% from 3.75% on Tuesday as inflation continued to slow, the governor said.

Anca Dragu added that the bank predicted a slowdown in inflation in the second quarter of 2024 and "planned to support investment and growth in domestic consumption in this period."

In March annual consumer price inflation slowed to 3.9% after 4.3% in February.

The central bank, which last cut the rate in March, started easing monetary policy at the end of last year to support an economy that was hit by the fallout of Russia's invasion of neighboring Ukraine.

The International Monetary Fund's monitoring mission said the Moldovan economy had been recovering slower than initially expected. The mission was in Chisinau from April 22 to May 3 to assess the country's economic performance and authorities' progress on its Extended Fund Facility's lending program to the country.

Moldova's gross domestic product grew by 0.7% in 2023 after a 5.3% fall in 2022.

The IMF expected the economy to grow by 2.6% this year.

"Risks to a recovery in economic growth include the possibility of further turmoil in the energy sector or a new wave of refugees," it said in a statement.