## Moldova’s Inflation Targeting Regime

_Selected Issues Papers, April 2, 2026_

## Source details

**Canonical URL:** [Moldova’s Inflation Targeting Regime](https://www.imf.org/en/publications/selected-issues-papers/issues/2026/04/01/moldovas-inflation-targeting-regime-575109)

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## Bibliographic details
- Authors: Philipp Engler, Roland Meeks
- Published: April 2, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229042604.018

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### Overview
- Reviews the evolution of Moldova’s inflation targeting (IT) regime since its introduction in 2013.
- Focuses on the National Bank of Moldova’s (NBM) operational framework in a challenging macro-financial environment.
- Highlights that inflation has been volatile and largely driven by exogenous factors, complicating IT in a small, open, and partially dollarized economy.

### Drivers of inflation and environment
- Key exogenous drivers identified:
  - Food
  - Fuel
  - Regulated energy prices
  - High exchange rate pass-through
- Structural features complicating IT:
  - Small, open economy
  - Partial dollarization

### Evolution of monetary policy and operational framework
- Initial period (post-2013):
  - Monetary policy reacted mainly to exchange rate movements.
  - Inflation was targeted only indirectly through exchange rate responses.
- Since 2020:
  - Policy shifted toward a more conventional IT framework.
  - Systematic responses to the inflation gap were introduced.
  - Foreign exchange intervention was reduced.
  - Monetary transmission was strengthened.

### Empirical findings
- Evidence shows a transition in policy reaction functions:
  - From prioritizing exchange rate movements to more direct responses to the inflation gap.
- Reduced foreign exchange intervention and strengthened transmission are documented as characteristics of the post-2020 regime.

### Reserve requirements: costs and policy options
- The chapter assesses the costs of high reserve requirements.
- Discusses options for gradual normalization of reserve requirements.

### Subject matter and keywords (as provided)
- Subject: Asset and liability management, Excess liquidity, Exchange rates, Foreign exchange, Inflation, Inflation targeting, Liquidity, Monetary policy, Prices
- Keywords: central banking in small open economies, Excess liquidity, exchange rate pass-through, Exchange rates, financial market development, foreign exchange intervention, IMF country, IMF staff, Inflation, inflation gap, Inflation targeting, issues paper, Liquidity, liquidity management, Moldova, Moldova's inflation targeting regime, monetary policy transmission, reserve requirements

*Philipp Engler and Roland Meeks. April 2, 2026. "Moldova’s Inflation Targeting Regime", Selected Issues Papers 2026, 025.*

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/04/01/moldovas-inflation-targeting-regime-575109_