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Moldova raises interest rate to 18.5% to tackle inflation spike

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CHISINAU (Reuters) -Moldova raised its main interest rate to a six-year-high of 18.5% from 15.5% on Friday, the sixth successive hike to tackle inflation pushed up by the coronavirus pandemic, high global prices and the war in neighbouring Ukraine.

Moldova began raising interest rates in July last year, aiming to bring inflation down to its target of around 5%.

“In order to fight inflation, the bank is tightening monetary policy in order to reduce the liquidity pressure that weighs on prices,” Central Bank Governor Octavian Armasu told reporters after the decision.

Friday’s move follows in the footsteps of the National Bank of Ukraine, which more than doubled its key rate to 25% on Thursday as it resumed monetary tightening for the first time since the Russian invasion in February.

Moldova’s annual inflation jumped to 27.07% in April from 22.16% in March and 13.94% at the end of 2021.

The central bank will review the rate again in August.


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