IMF conditions further financing of Moldova on promoting specific reforms

Moldova has to ensure full independence for the National Bank of Moldova (BNM) over the monetary policy, and the government shall not be credited directly by BNM. These are some of the requirements made by the International Monetary Fund (IMF) so that RM could benefit from the whole credit offered by IMF. IMF Resident Representative in Chisinau, Johan Mathisen mentioned on Friday, 19 May, at ta press conference that according to the new Agreement concluded with RM, the government shall transfer its deposits of BNM commercial banks, except the accounts of the National Company of Medical Insurances, National House of Social Insurances, special and stock funds. IMF also requires efficient management of public patrimony, liquidation of Creditors’ Council by transmitting its functions to other fiscal bodies, modernizing the financial sector, improving the business environment etc. „All these objectives will be obtained only if along with the Macroeconomic Program approved by IMF, there will be implemented reforms in other fields as well, the judicial systems, agriculture, fight against corruption and others,” the official mentioned. Mathisen highlighted that the Program with IMF allows RM to launch itself on a sustainable increasing economic path, which will be based on local investments, as well as foreign ones. According to him, this has already certain outcomes. Due to approval of the Program, the Club of Paris accepted re-scheduling foreign debts of Moldova, providing the possibility to use about 100 million dollars not for paying the external debt, but for satisfying the most urgent needs of the country. IMF Executive Board approved, on 5 May 2006, a new Agreement with Moldova, for a three-year term, on the base of Poverty Reduction and Economic Growth Mechanism, about 118,2 million dollars. The first amount of 16,9 million dollars of IMF credit was provided on 10 May and will be used for keeping the stability of the national currency and payment balance, as well as for crisis situations. A part of the credit will also be used for implementing the goals of the Economic Growth and Poverty Reduction Strategy (SCERS). IMF credits are provided in a preferential regime, with an interest rate of 0.5%, for a 10-year period and with a 5 –year grace term. Funds will be provided every 6 months, and after every stage an evaluation by IMF is to be operated.