This paper seeks to analyse the impact of excess liquidity on monetary policy implementation in the Republic of Moldova. The analysis covers the period of the last ten years (2008-2017). We firstly investigate the excess liquidity definition, problems associated with the measurement of the excess liquidity, and the impact of excess liquidity on monetary policy implementation, because the surplus liquidity in the banking system changes the monetary transmission mechanism and, in general, reduce the effectiveness of the traditional instruments, especially the interest rate. The findings indicate that considerably impacts on the monetary policy efficiency and on the mix of the monetary tools used by the central bank in order to achieve its monetary policy goals and to manage this phenomena. The empirical results additionally shows that banks that hold this liquidity, as well as monetary authority, support big costs. Recommendation therefore is that the banks, under the guidance of the banking supervisor, ought to adopt a general framework for excess liquidity management.