OREANDA-NEWS. July 04, 2008. During the presentation of the fourth edition of Realitatea Economica, independent analyst of the Expert-Grup Ana Popa noted that recently the National Bank has been accused that it favours the growth of lei rate to dollar and euro.

"The growth of inflation together with the increase in lei exchange rate also causes questions about the efficiency of the monetary policy. Yet these accusations are too tough ", -Ana Popa said. According to her, though the current growth can not be regarded as a positive factor since it is not based on the serious economic growth, the causes of this phenomenon can not be left unconsidered.

She noted that factors affecting the course of lei are: large amount of remittances, foreign investments growth and increase in financial and technical assistance provided by international financial organizations. Ana Popa said that rejection of targeting inflation and further targeting of the exchange rate would create big problems to the government, which will not be capable to provide corresponding growth of wages.

According to the analysts, targeting of the exchange rate instead of inflation is illogical, since the inflation is the main factor affecting the economy and population, while the exchange rate mainly depends on the competitiveness of economy, external assistance, remittances and trade. According to statistics, share of population dependent on foreign remittances, which suffers losses from the decrease in U.S. dollar and euro exchange rate, is not great.

For example, the share of remittances from abroad in total household income makes 13.9%. The expert noted that the growth of lei rate contributes to reducing inflationary pressures and achieving the primary objective of the National Bank to maintain price stability. Thus, NBM tries to maintain price stability by increase in the base rate on REPO shares and mandatory reserves requirements.

The mean reason for inefficiency of the increase in the base rate in Moldova is underdevelopment of monetary policy instruments. Thus, recent increase in mandatory reserves requirements should reduce the growth of loans issued. "However, National Bank is not able to maintain prices.

This requires support of the government through careful fiscal and budgetary policy", - Anna Popa added.