Expert-Grup Recommendations on Stabilising the Moldovan Leu

The study finds that the leu's weakening, which began in the last quarter of 2014, signals an economy entering a contraction phase, while the banking sector has been weakened by dubious transactions. Contributing factors include lower transfers in US dollars and euros, reduced exports to the CIS, the behaviour of the population and certain banking transactions. Recession in Russia and Ukraine will further cut remittances and exports. In 2015 Moldova may see an economic decline of 1-2%, and inflation will likely exceed the 6.5% ceiling set by the National Bank of Moldova, possibly passing 7%.

Expert-Grup recommends urgently negotiating and signing a new agreement with the IMF, gradually easing monetary policy, and lowering the reserve requirement on foreign-currency deposits to increase the supply of dollars and euros. The Government should make full use of the free trade area with the EU, stimulate exports, improve the competitive environment and combat fraudulent transactions.