Moldovan central bank cuts key rate to 4.75% as inflation slows

(Reuters) - Moldova's central bank voted unanimously on Tuesday to cut its key interest rate to 4.75% from 6% as inflation continued to slow, the bank said.

The regulator, which last cut the rate in June, started easing monetary policy at the end of last year to support an economy that shrank 5.9% in 2022 as it was buffeted by Russia's invasion of neighbouring Ukraine.

"The National Bank of Moldova aims to stimulate credit and support domestic aggregate demand, both by encouraging consumption and investments, balancing the national economy and anchoring inflationary expectations," it said in a statement.

Consumer price inflation slowed to 8.6% in September year-on-year from nearly 10% in August, government data showed last month.

Last year annual inflation jumped to 28.74% as the war in Ukraine created uncertainty, energy prices soared and tens of thousands poured over the border, hurting the living standards of an already impoverished population.

The economy is expected to rebound modestly this year due to remittances and improved monetary conditions supporting consumption and investment.

The World Bank expects Moldova's gross domestic product to grow by 1.8% this year and inflation to decrease to about 5% by the end of 2023.

(Reporting by Yulia Dysa; Writing by Olena Harmash; Editing by Tom Balmforth and Mark Potter)