Moldova's banking system, part of the Soviet system during the communist era, underwent major changes in 1991. The National Bank of Moldova (NBM), established in June 1991 and modeled on the Bank of Romania, is subordinate to Parliament. It has an extensive set of monetary policy instruments (such as maxÍÍÍimum lending rates and reserve requirements) and is legally responsible for bank supervision. However, shortages of trained staff and a lack of experience in making and executing monetary policy caused the NBM difficulties in its early years.

In 1995 Moldova's banking system was composed of the NBM and twenty-six private, joint-stock commercial banks, including the Joint Bank for Export and Import (Banca Mixta Pentru Export i Import). In 1995 the largest commercial banks were Moldindconbanc, Banca de Economii, Banca Sociala, Agroindbanc, Victoriabanc, and Interprinzbanca. The banking system also includes four branches of foreign (Romanian and Russian) banks.

After Russia enacted economic reform measures in January 1992, Moldova liberalized prices for most of its commodities (except bread, milk, energy, utilities, and transportation) and raised other prices by 200 to 425 percent. Price controls were eliminated gradually, with none left after May 1994.

In early 1995, the average monthly rate of consumer inflation was estimated at under 5 percent. This represented a major improvement, as the annual inflation rate had been 105 percent in 1994, 415 percent in 1993, and a staggering 1,500 percent in 1992.

In the early years of its independence, Moldova used both the Russian ruble and the Moldovan coupon (issued only to residents of Moldova) as its currencies. The leu (for value of the leu--see Glossary) was introduced in November 1993 to replace these currencies and to escape the inflation in other former Soviet republics. It has remained reasonably stable against major hard currencies despite the country's high rates of inflation.

Data as of June 1995