The latest data from the National Bank of Moldova show that Moldovans working abroad sent home the equivalent of $ 116 million in October, 19% more than in the same month of the previous year. And since the beginning of 2017, the total amount of transfers has amounted to $ 988 million. This could boost the NBM foreign exchange reserves, which currently amount to USD 2.7 billion. It is the opinion expressed by the journalist Victor Ursu in the show "15 minutes of economic realism".
Although the remittances grow, we notice that the volume of foreign exchange transactions in Moldovan currency exchange offices decreased in October compared with the previous month, by 9.4 percent - to 341.6 million USD. According to the National Bank, the volume of foreign currency purchases in the CSV against MDL decreased by 12.3 percent - to USD 245.9 million in equivalent, and the volume of sales decreased by 1% to 95.7 million USD.
At the same time, in October compared to the previous month, both the net foreign exchange supply of individuals and the net demand of foreign currency by economic agents decreased by USD 34.9 million (17.9%) and USD 34.4 million ( 24.2 percent), respectively. A demand and a low offer led to the dollar appreciating by 1.5% to 17.43 lei. The increase in foreign currency supply will increase in December as a result of winter holidays when some Moldovans working abroad will come home and shop by exchanging currency. On the other hand, the demand for currency will also increase from the suppliers of energy resources as they buy foreign currency to pay for gas and electricity imports.
Although in the market there is a decline in supply and demand for foreign currency, in October the NBM bought $ 80 million from the market and reserves reached $ 2.69 billion. In November, the central bank also bought $ 20 million from the market, and foreign exchange reserves reached $ 2.7 billion, rising $ 29 million. Purchases of foreign currency on the market take place as a result of the excessive appreciation of the Moldovan Leu against the dollar and the euro.
If the NBM continues to intervene in the foreign exchange market by buying foreign currency, foreign exchange reserves may exceed the historic maximum of 2.8 billion in 2014. Currently, foreign exchange reserves are sufficient to absorb potential currency shocks. Their total sum covers over six months of imports.
The show is made by IDIS "Viitorul" in partnership with Radio Free Europe.
