IMF Presentation

2010-02-03/08:29/ Financial assistance provided by IMF becomes more substantial and less conditional, expert

Chisinau (IPN) Through its financial and consultative assistance, the IMF wants to be more flexible and closer to the needs of the low income countries with which it cooperates, especially in this period of crisis, Olga Stankova, expert in communication with the IMF, said during a seminar, quoted by Info-Prim Neo.

She said that in order to help the countries facing macroeconomic problems, the IMF doubled the access limits to 200 percent of a country's quota on an annual basis and to 600 percent of quota cumulative limit. Under the Poverty Reduction and Growth Facility (PRGF), the quota was 100%. The Fund also simplified the lending conditions for the programs financed under the new Extended Credit Facility.

“There are fewer conditions and more money for supporting Moldova's economic program aimed at restoring fiscal and external sustainability, preserving financial stability, reducing poverty, raising growth and increasing spending for essential social services,” Olga Stancova said.

In April 2009, the IMF decided to provide US$250 million to crisis-stricken countries, allowing using the Special Drawing Rights for supporting the budgets. Last yearend, Moldova received SDR equivalent to US$180 million (about 2 billion lei) to reduce the budget deficit and honor the major payments.

Tokhir Mirzoev, the new IMF Resident Representative for Moldova, said the US$574 million loan granted to Moldova for implementing the economic program negotiated with the IMF is very advantageous. About US$148 million provided under the Extended Credit Facility (ECF) will be transferred this year to the Ministry of Finance to support the budget. The remaining ECF money and the Extended Fund Facility (EFF) will be disbursed to the National Bank for the replenishment of its foreign exchange reserves.

The lending conditions are as follows: the ECF loan is repayable in ten years with a grace period of 5.5, at a zero interest rate; the EFF loan is repayable in ten years with a grace period of 4.5, at a variable SDR interest rate, of 1.23% at present.