How does an increase in the NBM interest rate affect people with loans?

If inflation has already returned to the target range, why does the NBM continue to raise the base rate?

For monetary policy, it is not only important where inflation stands today, but, above all, where it will be in 6–12 months. The July data are encouraging, but they do not fundamentally change the outlook. The NBM forecasts that inflation will accelerate to 9.2% in the fourth quarter of 2026. Consequently, the increase in the base rate should be viewed as a preventive measure rather than a reaction to the 6.34% inflation rate in July.

Is there a risk that the NBM will be fighting inflation that is largely driven by external factors?

That is a valid point, and it is very important to understand that some of the price pressure stems not from domestic demand but from energy, food, and regulated prices. The NBM cannot lower oil, gas, or food prices through its monetary policy rate. But it can influence what happens after such a shock occurs.

For example, if energy prices rise, the first consequence is a direct impact on the consumer price index (CPI). The problem arises when this price increase begins to generate second-round effects—wage growth, widespread price increases, and an acceleration in consumption and lending. This is precisely where monetary policy plays a very important role.

What is the main risk for rising inflation in the coming months?

In my view, the main risk lies in a combination of external shocks and domestic pressure on demand. The NBM itself assesses the external environment as characterized primarily by inflationary risks: international food prices have been revised upward, and the forecast for natural gas has also been adjusted upward.

At the same time, it is essential to monitor lending and consumption trends very closely. If domestic demand remains strong enough to allow companies to quickly pass on increased costs to consumers, external shocks could become more persistent.

The NBM forecasts inflation at 9.2% by the end of the year. Is this an alarming scenario?

This is a level that should be taken seriously. However, this does not mean that inflation is out of control. The inflation profile is important: the NBM forecasts a peak in the fourth quarter of 2026, after which inflation will begin to decline and return to the target range in the third quarter of 2027.

In my view, the main message of the forecast is that the disinflation process will proceed more slowly than we previously anticipated, rather than that the economy is entering an inflationary spiral.

Could inflation exceed the NBM's forecast?

No macroeconomic forecast should be viewed as an exact figure, but rather as a baseline scenario based on certain assumptions. In this case, the uncertainty is higher than usual.

I would focus more on the direction and the factors underlying the forecast than on the last tenth of a percentage point. If energy and food prices or external conditions deviate significantly from the NBM's assumptions, then the inflation forecast will change as well.

What does the NBM's rate hike mean for people with loans?

First and foremost, it should be noted that the transmission of monetary policy effects is not instantaneous. An increase in the base rate is gradually reflected in the money market, the cost of bank funding, and, subsequently, in loan rates.

However, the NBM rate should not be confused with the interest rate on a bank loan. The final interest rate also depends on the cost of funds, liquidity, credit risk, competition among banks, and each institution's margin.

At the same time, the flip side must also be considered: higher interest rates make deposits in lei more attractive and help curb consumption, which is precisely one of the mechanisms through which monetary policy seeks to reduce inflationary pressure.

But isn't there a risk that high interest rates will slow the economy down too much?

This is always the key trade-off in monetary policy. If the interest rate is too low, there is a risk that inflation will become entrenched. If it is too high and remains so for too long, there is a risk of curbing investment, lending, and consumption.

In Moldova's case, this balance is all the more important because the economy is already relatively weak. In the first quarter of 2026, GDP grew by only 0.4% on an annualized basis, according to data released by the NBM.

Therefore, I believe that monetary policy should be as restrictive as necessary to curb inflation, but no more restrictive than necessary.

When do you think the NBM will begin to lower the base rate?

I believe it is still too early to pinpoint a specific meeting. The NBM will respond to the data, not to the calendar. Before any potential policy easing, we must first ensure that inflationary pressures are steadily declining and that inflation expectations remain firmly anchored.

The current forecast indicates that inflation will begin to decline after peaking in the fourth quarter of 2026, but a return to the target range is not expected until the third quarter of 2027. Therefore, I would not base my baseline scenario on a rapid rate cut.

Should people put off taking out a loan right now?

I don't think there's a one-size-fits-all answer here. For a company or an individual with a sound business plan, the decision should not be made solely on the basis of whether the interest rate is 0.5 percentage points higher or lower.

It is much more important to assess whether the project generates sufficient income to service the debt and how it will withstand a situation in which interest rates remain high for an extended period.