IMF examines methods for smoothing foreign economic shocks in Moldova

An International Monetary Fund (IMF) expert, Washington D.C., is currently on a working visit in Chisinau to examine mid-term methods by which the Moldovan Government could overcome foreign shocks. Resident Representative of IMF in Moldova, Johan Mathisen, stated that the expert will also recommend the Government long-term solutions to settling down these shocks. As Mathisen states, the external economic shocks created a financial deficit of USD 50 mln, and the donors committed themselves to contribute to removing this financial deficit as part of the Meeting of the Consultative Group in Brussels. “The donors’ funds will serve as a financial insurance for Moldova to attain its macroeconomic goals set for the economic programme, by fulfilling certain economic tasks such as the reduction of inflation rate and augmentation of foreign currency reserves. The IMF Executive Board appreciated the Government’s efforts to maintain the macroeconomic stability despite foreign shocks, said Mathisen. Thus, IMF Board decided to augment the loan intended for Moldova from USD 120 mln to USD 167 mln. Also, the Board’s decision makes available a disbursement of USD 48.2 mln. As many as USD 17.2 mln have been disbursed to date. The mechanism for funding the poverty reduction and growth facility (PRGF) is the credit mechanism of IMF in preferential regime for the states on low income. The PRGF loans carry an interest rate of 0.5% and are repayable over 10 years with a 5.5-year grace period. The repayments will be disbursed each six month. An assessment by IMF will be carried out after each instalment.