Although risks to financial stability in Moldova remain contained for now, they are growing as the ratio of loans to GDP has reached its highest level since 2015 and housing prices are at historic highs - the IMF
This is stated in the International Monetary Fund’s materials on Moldova's financial system stability assessment, which was conducted by a group of IMF staff based on information available in February 2026. IMF experts note that Moldova's financial sector is small and dominated by banks, whose assets amount to 58% of GDP. Bank capital and liquidity significantly exceed the regulatory minimums, and the sector itself is highly concentrated and largely owned by foreign companies. Non-bank financial institutions account for about 12% of the total assets of the financial sector. Looser financial conditions in 2024–2025 and government programs to support housing construction contributed to rapid credit expansion and rising real estate prices, which increased risks to financial stability, although these risks remain contained at present. Financial conditions tightened in early 2025 after a significant interest rate cut in 2023–2024, but the National Bank of Moldova has made three additional rate cuts since August 2025, based on forecasts that inflation will fall below the target level in 2026. Private sector lending increased by approximately 30% year-on-year in mid-2025—the fastest pace in a decade—leading to a positive credit gap. Real estate prices rose by about 25% in 2024 and the first half of 2025. Lending momentum slowed toward the end of the year, and new mortgage lending stabilized, although it remains at a high level. According to the Fund's experts, the risks of a decline in asset values are driven by macroeconomic shocks, disruptions in external financing—especially in the area of remittances—and a potential revaluation of the real estate market. Geopolitical tensions, given Moldova's proximity to the Russian-Ukrainian war, and energy price volatility remain important sources of risk. Although credit quality has improved significantly, with non-performing loans at 4.5% in mid-2025, the lowest level since the 2014 banking crisis, rapid credit growth could weaken asset quality over time, especially if real estate prices correct sharply. IMF experts emphasize that Moldova's banking system is generally resilient to a severe adverse macroeconomic scenario, thanks to significant liquidity buffers in all banks and high initial capital in some institutions. A stress test of the macroeconomic scenario shows that the system-wide capital adequacy ratio would decline from 26.3% to 19.5%, remaining well above the minimum total capital requirement of 10%. However, four banks, which account for about 43% of the banking system's assets, appear vulnerable due to limited initial capital reserves and large loan portfolios with a higher share of household-oriented loans. These banks will be undercapitalized relative to the overall capital requirement (OCR), and the capital adequacy ratios of two banks will fall below the minimum requirement of 10%. Despite these shortcomings, the aggregate recapitalization needs—taking into account the second component and capital conservation buffer requirements—amount to 0.6% of GDP. The sector remains liquid under stress, supported by investments in sovereign and central bank securities, which account for about 20% of assets, although one bank falls slightly short of the minimum requirement. The fund's experts note that macroprudential policy should continue to be strengthened to limit vulnerabilities associated with rapid growth in lending and real estate prices. The expansion of the state housing support program in August 2024 led to a relaxation of lending standards, which should be reviewed. // 06.03.2026 — InfoMarket
