The National Bank of Moldova (BNM) raised its base rate by 1.5 percentage points to 9% on September 17, stepping up monetary tightening as inflation remains above the upper limit of its target range and energy costs add to price pressures. The decision was adopted unanimously by the BNM Executive Committee.

The BNM also raised its overnight lending rate to 11% and the repo rate to 9.25%, while setting the overnight deposit rate at 7%. Required reserve ratios were left unchanged at 18% for funds held in Moldovan lei and non-convertible currencies and 26% for freely convertible currencies.

The increase follows a 50 basis-point rate hike on August 6, which had lifted the policy rate to 7.5%. The latest move brings cumulative tightening this year to 3 percentage points. The central bank said inflationary pressures were intensifying from both the supply side, because of higher international prices for energy, food and raw materials, and domestic demand supported by rising disposable incomes.

Annual inflation reached 6.96% in August, up 0.62 percentage points from July and above the upper limit of the BNM’s 5% target plus or minus 1.5 percentage points. The central bank said inflation was nevertheless lower than projected in its August forecast, largely because regulated prices had risen later than expected following a delay in adjusting the natural gas tariff.

Energy prices are expected to remain an important source of pressure. Moldova’s National Agency for Energy Regulation approved higher regulated natural gas prices on August 21, citing a significant increase in procurement costs. The approved supply price rose by some 40%, although the impact on individual household tariffs depends on the applicable regulated category.

The BNM said the rate increase is intended to reduce inflationary pressures, limit the secondary effects of supply shocks, encourage saving over consumption and anchor inflation expectations. It expects inflation to return within the target range in the third quarter of 2027.

The central bank also revised inflation risks downwards for the third quarter of 2026 but upwards for the fourth quarter and the first half of 2027, reflecting greater uncertainty over the persistence of price pressures.