International Monetary Fund approves three-year agreement with Moldova
10:36 | 08.11.2016 Category: Economic
Chisinau, 8 November /MOLDPRES/- The Executive Board of the International Monetary Fund (IMF) approved a three-year agreement with Moldova on 7 November, financed through two credit instruments – Extended Fund Facility (EFF) and Extended Credit Facility (ECF), aimed at supporting the state economic and financial reform programme. Thus, Moldova got access to 129.4 million Special Drawing Rights (about 178.7 million dollars or 75 per cent of Moldova’s share at IMF).
According to a press release by the IMF Office in Moldova, about 35.9 million dollars will be provided to the Moldovan authorities immediately after approving this agreement. The remaining amount will be disbursed during the implementation of the programme within five installments.
IMF Deputy Managing Director Mitsuhiro Furusawa said “Moldovan authorities elaborated a comprehensive programme on strengthening economy and settling the key vulnerabilities. The programme’s goal is to fortify the recent economic stabilization and to progress in achieving an ample structural reform agenda, especially, in the financial sector. The firm commitment to promote healthy policy and to significantly improve economic governance will play a crucial role in ensuring perspectives for economic growth for long term”.
The official added that a significant progress had been already achieved in increasing the resistance of banking sector and removing the drawbacks that made possible the 2014 banking crisis.
At the same time, Furusawa said that budgetary and fiscal policy had been recently constrained by the decrease in revenues and funding constraints. “Budgetary deficit for 2016 will increase slightly in order to encourage the economic recovery, and the level of the state debt remains sustainable, despite the high costs of the banking crisis. It will be necessary to anchor the budgetary and fiscal policy in a robust medium-term framework and to take measures to consolidate the revenue base and to prioritize social and infrastructure costs”.
The monetary policy was adequate, being focused on the goal of maintaining inflation at a low level, in the context of a flexible regime of exchange rate. Since 2015, the inflation pressures significantly decreased, so that the National Bank of Moldova had the possibility to ease the monetary policy. Fast rehabilitation of the banking sector will play a crucial role in release of quality loan growth in the economic sectors.
The structural reforms reflecting the priorities set in the National Development Strategy will lead to increasing competitiveness, drawing investments, diversifying exports and achieving sustainable and inclusive economic growth. Strengthening the prevention of money laundering and terrorism financing, supervising the National Anticorruption Centre and framework for disclosure of information on property owned by the top officials will heavily boost the good governance and transparency.
“In the context of the programme supported by IMF, Moldova will benefit from the financial and technical assistance, while it implements deep reforms in the financial sector and will offer the authorities an area needed to promote a more balanced budgetary and fiscal policy, as well as it will contribute to supplement international reserves,” the communiqué reads.
(Editor A. Răileanu)