Moldova or sometimes, officially the Republic of Moldova (Romanian: Republica Moldova, is a landlocked country in Eastern Europe, bordered by Romania to the west and Ukraine to the north, east, and south. The capital city is Chișinău.
There are no official barriers to founding foreign banks or branches in Moldova. The central bank has increased the minimum capital requirement, which is expected to contribute to consolidation in the banking sector. First Initiative reports that the banking sector "consists of 16 commercial banks (2003). There are 14 locally-owned banks, while the two remaining ones are from Russia and Romania. The banking sector is highly concentrated with the five largest banks accounting for over 70% of lending in 2002. Unlike the banking sector, the insurance sector has high levels of foreign-participation. The largest insurance firm in Moldova, the former state insurance company, is owned by an Australian company." Moldova's stock exchange is very small, listing fewer than 25 companies in 2002. The Moldovan embassy reports that the government holds shares in two banks—JSCB "Banca de Economii" SA and JSCB "EuroCreditBank"—including a controlling share of Banca de Economii. The Economist Intelligence Unit reports that foreign investment accounts for approximately 50 percent of total banking capital.
|Agriculture||Wheat, corn, barley, tobacco, sugar beet, soybeans, beef and dairy cattle|
|Manufacture||Machinery, Energy, and Textiles|
|Services (Including financial)||63.2% (2015 estimate)|
|Peace Corps||Public Sector|
|Pedersen & Partners||Business Services|
History reference of the Stock Exchange of Moldova In December 1994, the Stock Exchange of Moldova (MSE), a joint-stock company of closed type, was established under the Law on securities circulation and stock exchanges. 34 promoters – the securities market professional participants took part in its establishing. First transactions were held on June 26, 1995, accepted as the birthday of the Stock Exchange of Moldova. The legal and organizational base, contributing to complex processes on the capital market, was created with the Stock Exchange's opening. Owing to the USA's support (the assistance was rendered by means of the USAID Agency), the Stock Exchange is equipped with the advanced technology for stock auctions.
Since May 1995, it is an active member of the European-Asian Stock Exchange Federation (FEAS), established in 1995 on the initiative of the Stock Exchange of Istanbul. The objective of the Federation is: to develop the capital markets of the member-states, in particular to improve the organizational structure; to settle the problems concerning regulation and self-regulation of the mechanism for brokers and dealers; to organize an efficient monitoring; development of corporate governance principles, etc.
Since July 2008, MSE is a member of the International Association of the CIS Exchanges. The association was founded in Moscow in 2000, in order to coordinate the efforts in the development of the financial markets in each state according to the international standards. At the initial stage of the MSE's development, were set the standards for the statutory capital for the Stock Exchange. Initially, the statutory capital was 238000 lei, and now it is 500000 lei. The equity capital adequacy norms, i.e. 1000000 lei, including guarantee fund adequacy norms, i.e. 30 % of the equity capital, which were set by the legislation, are currently observed. In 1998, the MSE founded the National Securities Depositary (NSD), a non-commercial joint-stock company of closed type. The event coincided with the third anniversary of the first auctions. At the same time with the capital market development, the MSE's share reduced, while the stocks were divided between the NSD participants. In 1998, the introduction of a new trading system integrated with the depositary system gave the opportunity to operatively carry out transactions. The system implementation as well as the NSD foundation became possible thanks to the American company Price Waterhouse and USAID. In April 2000, the Stock Exchange of Moldova received the status of a self-regulating non-commercial organization.
As a self-regulating organization, the Stock Exchange is a constituent part of the common mechanism of the securities market regulation, vested with corresponding authority: it works out regulations and standards of its Members' activity. But since 2008, due to the change of the securities market legislation the MSE lost its status of a non-commercial organization, becoming a commercial one and therefore losing its status of a self-regulating organization. The mechanism of the stock negotiations is governed by the MSE’s rules. Violations committed during the stock exchange transactions are examined by the Stock Exchange Disciplinary or/and Arbitration Commission. Starting with 2000, in order to reflect the capital market trends.
The National Commission introduced CNVM-32 index (at present CNPF). Through the years the calculation of the index has changed. The Structure of the Stock Exchange of Moldova The supreme ruling body of the Exchange is the General Shareholders Meeting. Between the general meetings a well-organized and efficient management is performed by The Board of the company which consists of 18 persons, elected for the term of 4 years. The auditing commission of the company shall exercise control over financial and economic activities of the company and be accountable to the general meeting of shareholders only. The Stock Exchange's activity is directly carried on by the Exchange's Departments, performing the clearly fixed functions on the basis of their own Regulations on organization, functioning, adopted by the Exchange's President. At present, the following departments and subdivisions function at the MSE: Marketing, Listing and Quotation Department. It is engaged in registering securities at the Exchange, in examining and including securities in the Exchange listing. Listing is a system of the market support that creates favorable conditions for an organized market, that allows to reveal the safest and the most qualitative securities and promotes their liquidity.
A special role of the Exchange is its role as an information source, as organized market, as a source of dissemination of information about securities. In the monthly bulletin "Bursa de Valori a Moldovei" (the Moldova Stock Exchange), the Department publishes information on securities admitted to circulation at the Stock Exchange, presents statistics and auction analysis, as well as other information. Simultaneously, information on transactions, sale and purchase offers are broadcast in mass media and on the MSE’s website www.moldse.md. Market Supervision Department – performs the following functions: observance of the laws and requirements of the legislation in the Stock Exchange's activity; supervision of the activity of the Stock Exchange's Members settlement of legal matters. Electronic System Department. The Department's functions are to control and support the Integrated Automated Trading System Stock Exchange (SAIT).
Moldova struggled through multiple years of recession since its independence and the Russian ruble devaluation of 1998 had a deleterious effect on the economy, which finally started to rebound in 2000. From 2000 to 2008 the country’s economic growth averaged 6.3% and was driven primarily by consumption fueled by remittances from Moldovan migrant workers. Growth moderately stalled at 4.8% in 2006 and 3.0% in 2007 as a result of an unprecedented drought in 2007 and a 2006 ban on Moldovan wine imports to Russia, but quickly resumed in 2008 at 7.8%. At the time Moldovan wines accounted for 1/3 of the country’s exports and 80% of the wine went to Russia. Despite the rapid GDP growth rates inflation remained a serious problem and it was only in 2008 that the inflation dropped below 10%, although keeping it at single digit levels remains challenging.
In 2009, at the peak of the global economic crisis, Moldova experienced a deep recession with -6% of GDP growth – a 13.8 point drop from the 2008 growth numbers. The economy was able to bounce back in 2010, and growth quickly resumed as a result of large scale international assistance. The World Bank reports that Moldova has staged a full recovery from the global economic crisis; however, 2012 growth statistics show a sharp decline at 3.5% of GDP.
Moldova’s initial recovery was mostly export-led as the Russian import bans and restrictive regulations on agriculture and new manufactured product exports eased, helping the private sector recover. Agriculture and food processing accounts for one-third of the country’s GDP. The recession also affected banks’ credit quality. In 2010 the situation in the banking sector improved, but lending conditions worsened despite expansionary monetary policy pursued by the National Bank.
Moldova’s economy remains overregulated and is weighed down by government control and large-scale corruption, forcing Moldovans over the years to migrate in increasing numbers to find work abroad. However, the global economic crisis and the EU financial crisis have forced many of those Moldovans to return home, causing the foreign remittances to decline, and the unemployment to increase. Unemployment rates rose from 4% in 2008 to 7.4% in 2010 and to 7.2% in 2012. More than one-quarter of Moldovan residents are living below the national poverty line, making Moldova Europe’s poorest country.
After the breakup from the USSR in 1991, energy shortages, political uncertainty, trade obstacles and weak administrative capacity contributed to the decline of economy. As a part of an ambitious economic liberalization effort, Moldova introduced a convertible currency, liberalized all prices, stopped issuing preferential credits to state enterprises, backed steady land privatization, removed export controls, and liberalized interest rates. The government entered into agreements with the World Bank and the International Monetary Fund to promote growth. The economy reversed from decline in late 90's.
Moldova declared independence on 27 August 1991, as part of the dissolution of the Soviet Union. The current Constitution of Moldova was adopted in 1994. A strip of Moldovan territory on the east bank of the river Dniester has been under the de facto control of the breakaway government of Transnistria since 1990.
Due to a decrease in industrial and agricultural output following the dissolution of the Soviet Union, the service sector has grown to dominate Moldova's economy and currently composes over 60% of the nation's GDP. However, Moldova remains the poorest country in Europe.
Moldova is a parliamentary republic with a president as head of state and a prime minister as head of government. It is a member state of the United Nations, the Council of Europe, the World Trade Organization (WTO), the Organization for Security and Cooperation in Europe (OSCE), the GUAM Organization for Democracy and Economic Development, the Commonwealth of Independent States (CIS) and the Organization of the Black Sea Economic Cooperation (BSEC) and aspires to join the European Union.
The name "Moldova" derives from the Moldova River; the valley of this river served as a political centre at the time of the foundation of the Principality of Moldavia in 1359. The origin of the name of the river remains unclear. According to a legend recounted by Moldavian chroniclers Dimitrie Cantemir and Grigore Ureche, prince Drago? named the river after hunting an aurochs: following the chase, the prince's exhausted hound Molda drowned in the river. The dog's name, given to the river, extended to the Principality.
Moldova is a unitary parliamentary representative democratic republic. The 1994 Constitution of Moldova sets the framework for the government of the country. A parliamentary majority of at least two-thirds is required to amend the Constitution of Moldova, which cannot be revised in time of war or national emergency. Amendments to the Constitution affecting the state's sovereignty, independence, or unity can only be made after a majority of voters support the proposal in a referendum. Furthermore, no revision can be made to limit the fundamental rights of people enumerated in the Constitution.
The country's central legislative body is the unicameral Moldovan Parliament (Parlament), which has 101 seats, and whose members are elected by popular vote on party lists every four years.
The head of state is the President of Moldova, who between 2001 and 2015 was elected by the Moldovan Parliament, requiring the support of three-fifths of the deputies (at least 61 votes). The president of Moldova has been elected by the parliament since 2001, a change designed to decrease executive authority in favour of the legislature. Nevertheless, the Constitutional Court ruled on 4 March 2016, that this constitutional change adopted in 2000 regarding the presidential election was unconstitutional, thus reverting the election method of the President to a two-round system direct election.
The president appoints a prime minister who functions as the head of government, and who in turn assembles a cabinet, both subject to parliamentary approval.
The 1994 constitution also establishes an independent Constitutional Court, composed of six judges (two appointed by the President, two by Parliament, and two by the Supreme Council of Magistrature), serving six-year terms, during which they are irremovable and not subordinate to any power. The Court is invested with the power of judicial review over all acts of the parliament, over presidential decrees, and over international treaties, signed by the country
The Moldovan economy has strongly recovered from the drought-related contraction in 2012. Following a decline of 0.7 percent in 2012, the economy expanded by 8.9 percent in 2013, led by strong rebound in agriculture and related industries, private consumption and exports. Inflation remained within the NBM's (National Bank of Moldova) target range of 5 percent ± 1.5 percentage points. The overall budget deficit narrowed to 1.8 percent of GDP in 2013 from 2.2 percent of GDP in 2012, partly reflecting the under execution of investment projects. The external accounts continued to improve with the current account deficit narrowing to about 5½ percent of GDP, reflecting strong export performance, contained import growth, and still strong inflow of remittances. International reserves increased to US$2.8 billion (5 months of imports or 105 percent of short-term debt). The real effective exchange rate (REER) depreciated by 3½ percent. Although estimates point to possible
modest overvaluation of the real exchange rate, external competitiveness appears broadly adequate as reflected in strong sustained export performance. However, the near-term economic outlook is weak. Main risks to the near-term outlook relate to serious vulnerabilities and governance issues in the banking sector, policy slippages in the run up to the elections, intensification of geopolitical tensions in the region, and a further slowdown in activity in main trading partners. Moldova remains highly vulnerable to fluctuations in remittances from workers abroad (24 percent of GDP), exports to the Commonwealth of Independent States (CIS) and European Union (EU) (88 percent of total exports), and donor support (about 10 percent of government spending). The main transmission channels through which adverse exogenous shocks could impact the Moldovan economy are: remittances (also due to potentially returning migrants), external trade, and capital flows. Staff's spillover analysis suggests that further strengthening of fiscal and external buffers would be critical for mitigating the impact of external shocks, particularly in light of the Moldova's strong links and synchronized business cycle with trading partners.
Moldova largely achieved the main objectives of the combined ECF/EFF (IMF financial credit) supported program that expired on 30 April 2013. The economy has strongly recovered from the drought-related contraction in 2012 but will slow down in 2014. Key risks to the near-term outlook relate to financial stability, fiscal policy slippages in the run up to the 2014 parliamentary elections, a further slowdown in activity in main trading partners, and intensification of geopolitical tensions
Corporate governance in the banking sector is a major concern. In line with FSAP recommendations, significant weaknesses in the legal and
regulatory frameworks must be urgently addressed to ensure stability and soundness of the financial sector. Moldova has achieved a substantial degree of fiscal consolidation in recent years, but this trend is now reversing. Resisting pre-election pressures for selective spending increases and returning to the path of fiscal consolidation would reduce reliance on exceptionally-high donor support. Structural fiscal reforms would help safeguard sustainability. Monetary policy has been successful in maintaining inflation within the NBM’s target range. Going forward, the NBM needs to remain ready to adopt a tightening bias if inflationary pressures start emerging. There is room to strengthen the inflation targeting regime. The implementation of structural reforms outlined in the National Development Strategy (NDS) Moldova 2020—especially in the business environment, physical infrastructure, and human resources development areas—would help boost potential growth and reduce poverty. Moldova's remarkable recovery from the severe recession of 2009 was largely the result of sound macroeconomic and financial policies and structural reforms. Despite a small contraction in 2012, Moldova’s economic performance was among the strongest in the region during 2010–13. Economic activity grew cumulatively by about 24 percent; consumer price inflation was brought under control; and real wages increased cumulatively by about 13 percent. This expansion was made possible by adequate macroeconomic stabilization measures and ambitious structural reforms implemented in the wake of the crisis under a Fund-supported program. In November 2013, Moldova initialed an Association Agreement with the EU which includes provisions establishing a Deep and Comprehensive Free Trade Area (DCFTA).
A political crisis in early 2013 led to policy slippages in the fiscal and financial areas. The political crisis that broke out in early 2013 was resolved with the appointment of a government supported by a pro-European center-right/center coalition in May 2013. However, delays in policy implementation prevented completion of the final reviews under the ECF/EFF arrangements.
Despite a sharp decline in poverty in recent years, Moldova remains one of the poorest countries in Europe and structural reforms are needed to promote sustainable growth. Based on the Europe and Central Asia (ECA) regional poverty line of US$5/day (PPP), 55 percent of the population was poor in 2011. While this was significantly lower than 94 percent in 2002, Moldova's poverty rate is still more than double the ECA average of 25 percent. The NDS—Moldova (National Development System) 2020, which was published in November 2012, focuses on several critical areas to boost economic development and reduce poverty. These include education, infrastructure, financial sector, business climate, energy consumption, pension system, and judicial framework. Following the regional financial crisis in 1998, Moldova has made significant progress towards achieving and retaining macroeconomic and financial stabilization. It has, furthermore, implemented many structural and institutional reforms that are indispensable for the efficient functioning of a market economy. These efforts have helped maintain macroeconomic and financial stability under difficult external circumstances, enabled the resumption of economic growth and contributed to establishing an environment conducive to the economy's further growth and development in the medium term.
The government's goal of EU integration has resulted in some market-oriented progress. Moldova experienced better than expected economic growth in 2013 due to increased agriculture production, to economic policies adopted by the Moldovan government since 2009, and to the receipt of EU trade preferences connecting Moldovan products to the world's largest market. Moldova has signed the Association Agreement and the Deep and Comprehensive Free Trade Agreement with the European Union during summer 2014. Moldova has also achieved a Free Visa Regime with the EU which represents the biggest achievement of Moldovan diplomacy since independence. Still, growth has been hampered by high prices for Russian natural gas, a Russian import ban on Moldovan wine, increased foreign scrutiny of Moldovan agricultural products, and by Moldova's large external debt. Over the longer term, Moldova's economy remains vulnerable to political uncertainty, weak administrative capacity, vested bureaucratic interests, corruption, higher fuel prices, Russian pressure, and the separatist regime in Moldova's Transnistria region. According to IMF World Economic Outlook April 2014, the Moldovan GDP (PPP) per capita is 3,927 International Dollars, excluding grey economy and tax evasion.
The leu (ISO 4217 code MDL) is the currency of Moldova. Like the Romanian leu, the Moldovan leu (pl. lei) is subdivided into 100 bani (singular: ban). The name of the currency originates in Romania and means "lion
Between 1918 and 1940 and again between 1941 and 1944, when Moldova was part of Romania, the Romanian leu was used in what was then the eastern part of the broader Romanian region of Moldavia (Moldova in Romanian). The Moldovan leu was established on 29 November 1993, following the collapse of the Soviet Union and the creation of the independent republic of Moldova. It replaced the temporary cupon currency at a rate of 1 leu = 1000 cupon.
In Transnistria, an unrecognized state claimed in whole by Moldova, the Transnistrian ruble is used instead. The currency is not honoured by Moldova or any other state. In November 1993 coins of 1, 5, 10, 25 and 50 bani in aluminium as well as nickel-plated-steel 1 and 5 leu coins were put in circulation.
The aluminium 50 bani,nickel-plated-steel 1 and 5 leu coins were later withdrawn from circulation. Starting January 1998 the aluminium 50 bani was replaced by one constructed of brass-clad steel. No new 1- and 5 leu coins have been issued. 1-Ban coins were last minted in 2006. They remain legal tender, but are rarely seen in circulation, effectively leading to "Swedish rounding".
Since 1996 several commemorative coins for collectors have been issued.
There have been two series of Moldovan leu banknotes. The first series was short-lived and only included 1, 5, and 10 lei. The front of all of these notes—and all subsequent notes—feature a portrait of ?tefan cel Mare (Stephen the Great, also known as Stephen III of Moldavia), the prince of Moldavia from 1457 to 1504. The first two lines of the Miori?a (The Little Ewe) ballad appear on the back, printed vertically between the denomination numeral and the vignette of the fortress. The Miori?a is an old Romanian pastoral ballad considered one of the most important pieces of Romanian folklore. The lines “Pe-un picior de plai, Pe-o gur? de rai” translate as “Near a low foothill, at Heaven’s doorsill.
|National Song||"Limba noastră"|
|Currency||Moldovan leu (MDL)|
|GDP / GDP Rank||18.919 Billion USD|
|GDP Growth Rate||-1.1 Percent|
|GDP Per Captial||$5327.966 (PPP)|
< 1.0% Muslims
< 1.0% Hindus
< 1.0% Buddhists
< 1.0% Jews
< 1.0% Other Religions
President – Igor Dodon
Prime Minister – Pavel Filip
|Website||Go to the web|
|Public Debt||38.088 Percent|
|Unemployment Rate||4.983 Percent|
|Labor Force (Occupation)||-|