IMF provides next tranche of SDR 50 million to Moldova

The Executive Board of the International Monetary Fund (IMF) approved the decision to disburse the next tranche of its US$574-million loan to Moldova, which was agreed upon in the 2010-2012 financing program. The third tranche will be in the amount of 50 million Special Drawing Rights (US$79 million), 15 million of which will go directly to the Government and 35 million will replenish the National Bank's hard-currency reserves, Info-Prim Neo reports. In a communique, the Government says that as a result of this decision, the salaries of the auxiliary personnel working in the budgetary sector will be raised by 8.5% from July 1. There will be provided lump-sum compensations for heat of 390 lei to the entitled persons. Teachers' pays will be raised by 12.5% from September 1, while public servant's salaries by 12% from October 1. The guaranteed minimum income for social welfare will rise to 575 lei. This will allow extending the social support system by attracting new beneficiaries. The ceiling on local taxes was eliminated as a result of the negotiations with the IMF. Moldova’s three-year IMF program, approved on January 29, 2010, is supported by a loan of SDR 369.6 million, of which SDR 120 million (about US$80 million) have been already disbursed. One half of the loan is provided under the Extended Credit Facility, which carries a zero interest rate until end-2011, a grace period of 5½ years, and a 10-year maturity. The rest of the loan is provided under the Extended Fund Facility, which carries an annual interest rate equal to the SDR basic rate of charge (currently 1.27 percent), and is repayable over 10 years with a 4½ -year grace period.