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International seminar held at the National Bank of Moldova:
"Monetary transmission and inflation modeling"

On December 12, 2007, the National Bank of Moldova hosted a seminar on the topic: "Monetary transmission and inflation modeling", organized jointly with the IMF. Seminar was attended by experts from IMF, European central banks, European Commission, representatives of state authorities of Moldova, banking sector, civil society.

Seminar papers:

Welcome speech - Mr Leonid Talmaci, NBM's Governor (în Romanian language)

Inflation modeling one of the required conditions for ensuring and maintaining the price stability in Moldova -
Mr Victor Cibotaru, NBM's First Vivegovernor (în Romanian language)

Photo gallery

photos taken by BNM

photos taken by IMF

More information can be found in the newsclip below from Basa-Press News Agency...

National Bank to make a transition to direct inflation targeting regime in three years

Chisinau-12.12.2007/15:10:14/(BASA-economic) The National Bank of Moldova (BNM) will make a transition to a
direct inflation targeting regime in two-three years, stated BNM Deputy Governor Victor Cibotaru at the seminar on "Transmission of monetary policy and modelling inflation" held on Wednesday.

The final objective of direct inflation targeting is to reduce considerably the inflation level in Moldova. It implies that the central bank will make a public declaration about a quantitative inflation target for a certain period of time coupled with the objectives of the central bank to follow and reach this figure. Inflation targeting represents a direct tackling of the inflation issue rather than a set of specific instruments of the monetary policy, stated the BNM official.

According to Cibotaru, a big part of the countries in Central and East Europe that faced and continue to face similar inflation problems moved to the objective of direct inflation targeting.

BNM has already made the first step in the transition to inflation targeting by its recent development and approval of the action plan on the implementation of the inflation targeting strategy, Cibotaru says. It provides for the optimization of the BNM's monetary policy operations, establishment of an appropriate database and of the analysis, modelling and forecast framework, development of the public information policy and of the actions to improve the degree of civil society's confidence in the monetary policy. The action plan is planned to be carried out in 2-3 years, constituting a period of transition to the direct inflation targeting regime, the BNM first deputy governor stressed.

The inflation target will be set based on some analyses and modelling of an eventual evolution of the macroeconomic indicators. And based on the obtained forecast, the central bank will promote a monetary policy that will be aimed at levelling the effects that may lead to an inflation targeting failure. Once the inflation figure is announced, the BNM will make it available for the public and explain to the general public both the inflation level forecast, and the instruments applied with a view to temper the inflation expectations.

The following conditions should be in place for direct inflation targeting: bank's independence, a stable and well
developed financial market, availability of effective monetary instruments, an analysis and forecast unit within the

The National Bank Law 2006 created the necessary, but insufficient requisites for inflation targeting, therefore we are aware of the fact that we will be able to talk about a success in the inflation issue only when its level will get closer to the one in the developed countries, said First Deputy Prime Minister Zinaida Grecianii.

According to Grecianii, the efforts to bring inflation at a level by one figure will imply certain costs, however, from the economic growth perspective they are completely justified. To this end, the Government will support BNM's efforts to preserve inflation by a severe budget policy.

The seminar was organized by the National Bank of Moldova and the International Monetary Fund and is aimed at informing civil society and business community about the BNM's plans to make a smooth transition to inflation
targeting policy. The event was attended by decision-makers, representatives of the banking sector and IMF, Central European Bank officials as well as officials of the central banks from Albania, Czech Republic, the Netherlands, Poland and Russian Federation.