Moldova & IMF IMF Activities Publications Press Releases

CHISINAU, April 25 (Reuters) - The International Monetary Fund, which has refused to renew loans to Moldova due to slow reforms, is set to start work on a new programme, said Moldovan President Petru Lucinschi.

"I have received a letter from the IMF, expressing the intention to start work on a new memorandum with Moldova," Lucinschi told state television late on Monday.

The Fund, disappointed by the rejection of important privatisation laws by Moldova's
legislature, said last week it would not renew loans to the tiny agricultural nation.
The current $200 million Extended Fund Facility programme, under which Moldova has drawn less than half the sum, is due to expire on May 19.

Following the Fund's decision not to resume loans, the World Bank announced it is
withholding a $20 million tranche aimed at supporting the ex-Soviet state's budget.

Rating agency Moody's Investor Service also downgraded Moldova's rating.

Lucinschi said Moldova still had a chance of resuming cooperation with the Fund.
"The new (IMF) programme which may start being designed after May 19 will aim to fight poverty," he said, stressing that the adoption of laws on cash sell-offs in the lucrative wine and tobacco industries remained a major term for new loans.

The Fund's resident mission in Moldova has said it might take up to six months to prepare the new programme, called the Poverty Reduction and Growth Facility. It said Moldova might receive the first tranche of the new loan by the end of 2000.