Tiraspol, 5 April. /Novosti Pridnestrovya/. The deputy chairman of the Pridnestrovian Republican Bank (PRB), Vadim Stepanov, commented on the situation in Pridnestrovie's exchange market on the First Pridnestrovian TV channel. According to him, one of main difficulties is the imbalance of currency supply and demand in the domestic exchange market.
Vadim Stepanov recalled that the currency shortage first arose in late February-early March.
«A period prior to the signature of a general agreement on power supply with the Republic of Moldova is likely to have been a catalyst for this panic. Panic expectations and rush demand challenged the PRB's capability of fulfilling banks' requests for currency purchase. In recent months we have lost the most part of our gold and foreign currency reserves by fulfilling commercial banks' requests. Since March we have seen a huge imbalance, the increase in currency demand," said Vadim Stepanov.
He recalled that the central bank put forward an initiative to change the currency corridor.
«The main guideline of the PRB's monetary policy in recent years has been the establishment of exchange rate targets and the maintenance of the rate in the established limits. All this is done on the Supreme Council's approval. Today the situation is such that we have multiple rates besides the official one which has hit the ceiling — 11.30 per $1. Today we may speak about the existence of a 'grey market' whose rates differ from official one. Reasoning from our logic, changing the parameters of the currency corridor was to result in a more or less balanced rate which is higher than official but lower than in the grey market. The market would have got moving. The decision must be consolidated, meet the contemporary market's demands to fix finally a balanced exchange rate," said the PRB deputy chair.
Advocating changes in the currency corridor, Vadim Stepanov explained, the PRB has worked out a number of measures to maintain the rate in the established limits.
«We took these steps on 5 March, apart from declaring them as PRB decisions. Many of them have already been implemented and are biding time. The president, who signed a decree on mandatory sale of currency earnings, has also joined in the solution of the problem. Norms obliging exporters to sell 7% of their currency earnings will be introduced again. Now we see again a situation similar to that in 1999 when unofficial rates were 2, 2.5, and 3 million roubles per $1 and the official rate stood still at 1.120 million roubles. Back then the rate was formed on its own. At the same time, its slight adjustment could help to avoid that situation," said Vadim Stepanov.
He added that changing the currency corridor aims at making the exchange market self-regulating.
«We need a price target which would closely reflect the market rate to get the situation moving. It is difficult today to buy US dollars at 11.3. Some refuse to sell currency at 11.25. Changing the currency corridor through a realistic exchange rate will lead to the self-regulation of the exchange market," concluded the deputy chair of the PRB.
