remittances, real exchange rate appreciation and monetary policy in the republic of moldova
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Remittances, Real Exchange Rate Appreciation and Monetary Policy in the Republic of Moldova. Yerevan, Armenia 24 June 2010. Factors Underlying Compilation Methodology. Counterpart statistics on remittances to Republic of Moldova not applicable - PowerPoint PPT PresentationTRANSCRIPT
Remittances, Remittances, Real Exchange Rate Appreciation Real Exchange Rate Appreciation
and Monetary Policyand Monetary Policyin the Republic of Moldova in the Republic of Moldova
Yerevan, Armenia24 June 2010
Factors Underlying Factors Underlying Compilation MethodologyCompilation MethodologyCounterpart statistics on remittances to Republic of
Moldova not applicable
No threshold on reporting data through the ITRS
Accurate reporting of data by banks
Other available data sources (specialized surveys)
National Bank of Moldova: National Bank of Moldova: Remittances Estimation ModelRemittances Estimation Model
ABROAD MOLDOVA
(1) Money transfers
(2) FX cash transmission
MTOs agents/
subagents. Electronic transfers
Banks
Bank transfersCommercial banks
(act as MTOs agents)
Remittancesadjustments
FX cash withdrawal Households
Consumption In FX
Real estate,cars markets
Consumption innational currency
Exchangeoffices
Cash carried by migrant during home visits
Cash transferred by train conductors, bus drivers, etc.
Increase in FX deposits
Net export of FX cash
FX cash
National currency equivalent
Net buyingof FX cash
A B
C
DE
Remittances in the context of BOPRemittances in the context of BOP
0
100
200
300
400
500
600
700
2006,Q1
2006,Q2
2006,Q3
2006,Q4
2007,Q1
2007,Q2
2007,Q3
2007,Q4
2008,Q1
2008,Q2
2008,Q3
2008,Q4
2009,Q1
2009,Q2
2009,Q3
2009,Q4
$US
mill
ions
Compensation of employees Workers' remittances Other current transfers Money transfers via MTO Money transfers via Banks
Source: National Bank of Moldova, Balance of payments
Currency composition of the money Currency composition of the money transfers by natural personstransfers by natural persons
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007, Q1 2007, Q2 2007, Q3 2007, Q4 2008, Q1 2008, Q2 2008, Q3 2008, Q4 2009, Q1 2009, Q2 2009, Q3 2009, Q4 2010, Q1
USD EUR RUBSource: National Bank of Moldova
Main currenciesMain currenciesnominal exchange rate evolutionnominal exchange rate evolution
9.00
10.00
11.00
12.00
13.00
14.00
15.00
16.00
17.00
18.00
USD EUR
0.25
0.30
0.35
0.40
0.45
0.50
01.07 04.07 07.07 10.07 01.08 04.08 07.08 10.08 01.09 04.09 07.09 10.09 01.10 04.10
RUB
Source: National Bank of Moldova
Main currenciesMain currenciesnominal exchange rate evolution (2)nominal exchange rate evolution (2)
Exchange rate evolution as compared to the situation at 01.01.2007
0.50
0.60
0.70
0.80
0.90
1.00
1.10
01.07 04.07 07.07 10.07 01.08 04.08 07.08 10.08 01.09 04.09 07.09 10.09 01.10 04.10
USD EUR RUB
Source: National Bank of Moldova
Remittances vs. Remittances vs. Quarterly Average Exchange RateQuarterly Average Exchange Rate
0
100
200
300
400
500
600
2006,Q1
2006,Q2
2006,Q3
2006,Q4
2007,Q1
2007,Q2
2007,Q3
2007,Q4
2008,Q1
2008,Q2
2008,Q3
2008,Q4
2009,Q1
2009,Q2
2009,Q3
2009,Q4
$US
mill
ions
2
3
4
5
6
7
8
9
10
11
12
13
14
Compensation of employees Workers' remittances MDL/USD Average Exchange Rate
Source: National Bank of Moldova, Balance of payments
Gross remittances Gross remittances and trade deficitand trade deficit
0
160
320
480
640
800
960
1120
1280
1440
1600
2006,Q1
2006,Q2
2006,Q3
2006,Q4
2007,Q1
2007,Q2
2007,Q3
2007,Q4
2008,Q1
2008,Q2
2008,Q3
2008,Q4
2009,Q1
2009,Q2
2009,Q3
2009,Q4
$US
mill
ions
0
10
20
30
40
50
60
70
80
90
100
%
Import of Goods and services Export of Goods and services Remittances / Trade deficit (right axis)
Source: National Bank of Moldova, Balance of payments
Remittances vis-à-vis other inflowsRemittances vis-à-vis other inflows
0
100
200
300
400
500
600
2006,Q1
2006,Q2
2006,Q3
2006,Q4
2007,Q1
2007,Q2
2007,Q3
2007,Q4
2008,Q1
2008,Q2
2008,Q3
2008,Q4
2009,Q1
2009,Q2
2009,Q3
2009,Q4
Foreign direct investment (net) External loans (drawings) Inflow of governmental transfers Remittances
Source: National Bank of Moldova, Balance of payments
ConclusionsConclusions Migration and remittances are country specific issues, depend
on many factors such as geographical location, legal regulation of cross-border movement in host countries, language barriers, education level of migrants, etc. That is why countries should take into consideration their own specifics while elaborating estimation methods.
As the factors that influenced migration and remittances are changeable the methods of their estimation can not be permanent. They need periodical revisions.
Even if the data sources used for estimations seem to be reliable, use of additional data sources for the validation of assumptions is necessary
Monetary Policy for 2010Monetary Policy for 2010NBM monetary policy strategy has a medium-term focus,
to achieve and maintain price stability.Monetary policy for 2010, main objective:inflation objective* - 5.0 percent (± 1.0 percentage
points)As compared to: 9.0 percent by the end of the year – for 2009 10.0 percent by the end of the year – for 2008
*measured by the consumer price index published monthly by the National Bureau of Statistics (NBS)
Monetary Policy instrumentsMonetary Policy instrumentsMain monetary policy instrument:
open market operationsopen market operationsAuxiliary instruments
standing facilities, required reserves ratio and foreign exchange market interventions
Thank You for Attention!Thank You for Attention!