IMF endorses two reviews of Romania's stand-by arrangement

By bne IntelliNews March 27, 2014

The IMF’s executive board has completed the first and second reviews under its current 24-month stand-by arrangement with Romania, started last autumn. In addition, it ran an ex-post evaluation of the previous such 24-month deal carried out in 2011-2013.

The Fund made available SDR 584.1mn (about EUR 654.4mn) under the current stand-by deal, but the government treats the arrangement as precautionary.

The Fund’s remarks were largely positive – with notes on the need for:

  • The need to strengthen the monetary transmission mechanism
  • The reform of non-bank financial regulator in line with international practices
  • Improved capital spending, better revenue collection, and implementation of an expenditure control system
  • Measures to protect vulnerable households from deregulated energy prices.

FUND SAYS STRUCTURAL REFORMS NEED LOCAL COMMITMENT. In regard to the previous 2-year arrangement with Romania, the Fund concluded that the “program conditionality, particularly as regards complex structural reforms, is no substitute for country ownership,” which we see as an allusion to the failure of most of the attempts in the structural reforms area during the 2-year period. Petrochemical plant Oltchim's privatisation, the reforms at railway companies CFR Marfa and CFR Calatori and the so-called “private management” programmes at key state-owned companies have all failed despite formal procedures carried out by local authorities.

DATE OF NEW REVIEW UNCERTAIN. The Fund admitted Romania has requested a supplementary review to be carried out based on the end-Jun results. This review would be run concomitantly with the Article IV consultation and would also cover the mid-year budget adjustment. In regards to the next review of the funding deal, supposedly to take place meanwhile, there was no date indicated. Romanian finance minister Ioana Petrescu, in an interview earlier this week, was not able to indicate the schedule for the next review but most likely it will take place around the beginning of May.

Related Articles

Owner of Romania’s Dedeman reportedly close to signing largest ever deal in the Romanian office segment

Dragos Paval, owner of Romania’s biggest DIY retailer Dedeman, is reportedly close to signing an agreement with Africa Israel Investments for the acquisition of an office building project in ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Shares of Digi Communications drop as CEO of Romanian subsidiary is investigated for corruption

Shares in Digi Communications closed the day 4.1% down at RON39.5 (€0.86) per share on the Bucharest Stock Exchange on May 17, the day after they were floated. The company was hit by a ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss