IMF, Moldova reach staff-level agreement on three-year arrangement

By bne IntelliNews July 27, 2016

The International Monetary Fund (IMF) announced on July 26 that it has reached a staff-level agreement with Moldova over a future three-year programme with $180mn financing attached.

The IMF agreement will furthermore unblock critical external financing from Moldova’s development partners. The programme is tabled for endorsement by the IMF board in October. However, Romania is expected to disburse the first tranche of a €150mn loan immediately, since reaching the staff-level agreement was the pre-requisite condition.

IMF staff and the Moldovan authorities have reached a staff-level agreement on an economic reform programme to be supported by a three-year Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangement, the head of Fund’s mission to Moldova Ivanna Vladkova-Hollar announced in Washington.

The IMF mission held discussions with the Moldovan authorities on an IMF-supported economic programme in Chisinau from July 5-15, and subsequently in Washington.

The staff level agreement is subject to approval by IMF management and the executive board. Consideration by the executive board is expected in October, following the authorities’ implementation of a number of prior actions.

The programme sketched by Moldovan and IMF officials rests on two pillarr. The first regards the policies to ensure macroeconomic and financial stability. This involves securing a transparent shareholder structure in the banking system and strengthening the supervisory and regulatory framework, monetary policy aimed at achieving price stability, and fiscal policy aimed at better use of public funds, strengthening of public investments and support social and developmental objectives.

The second concerns structural reforms to facilitate growth. Structural reforms will aim at improving the business climate, attracting investment and enhancing Moldova’s growth potential. Initial measures will support the authorities’ anti-corruption efforts, sustainable energy policy, and fiscal reform agenda, including reforms to mobilise revenue, enhance the efficiency of expenditure and reduce fiscal risks.

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