Following the concluding of the ad-hoc review under the Extended Credit Facility and Extended Fund Facility Arrangements for the Republic of Moldova, the Executive Board of the International Monetary Fund welcomed the central bank’s decisive policy response to increased inflation, the National Bank of Moldova (NBM) has said.
Directors noted that the financial sector has remained resilient despite temporary liquidity pressures. They emphasized that the program’s focus on addressing significant governance weaknesses and institutional vulnerabilities remains critical and welcomed the emphasis on strengthening the rule of law and financial supervision. They noted that continued reforms under the program—if appropriately sequenced and resolutely implemented—will boost productivity, unlock private investment and support inclusive, sustainable growth.
“The Executive Board of the IMF noted that spillovers from the war in Ukraine are affecting the Moldovan economy through a variety of channels, including a spike in energy prices, trade disruptions, adverse confidence effects and the indirect impact of sanctions imposed against the Russian Federation,” says a press release issued by the NBM.
These and other difficulties faced by the Republic of Moldova owing to the war made the IMF immediately disburse about USD 144.81 million (SDR 108.15 million). The Board also approved an augmentation and rephasing of access under the program under the Extended Credit Facility and Extended Fund Facility Arrangements for the Republic of Moldova.
Total access under the blended 40-month ECF/EFF arrangements approved in December 2021 was increased by about US$260.11 million (SDR 194.26 million) to about US$795.72 million (SDR 594.26 million).
The immediate disbursement under the blended ECF/EFF program will allow Moldova to meet pressing balance of payments financing needs arising from these shocks.
