Moldova will be able to get $33 mln. From IMF after approval of new memorandum on economic and financial policy till the end of 2007 by imf executive board.
The head of IMF mission in Moldova Thomas Richardson announced this at the press conference on Tuesday. The mission reached preliminary agreement with the Moldovan authorities on MEFP for the remainder of 2007, which allows terminating the second review of the program within the mechanism of poverty level reduction and growth facility (PRGF). It is hoped that the IMF Executive Board will be able to consider this proposed agreement in late June 2007. As Thomas Richardson noted if everything is well, the fund will approve allocation of the third tranche PRGF of $33 million to Moldova. As he said, the third review of the program within PGRF mechanism is planned for October. In case of positive estimations, the new tranche at a rate of $16,9 million will be approved. The head of IMF Mission in Moldova emphasized, that it will be ordinary IMF’s credit tranche, which fund obliges to provide to Moldova once a year. Till now Moldova received IMF’s assistance for prompt overcoming external shocks - increase of the prices for gas and embargo for the export of wines to Russia. Thomas Richardson noted, that though external shocks haven’t been overcome yet completely - export of wines to Russia has not resumed – in the whole consequences were not as crucial as it was predicted earlier. He noted that in time of the visit to Moldova the mission assessed performance over the previous six months in implementing macroeconomic policies and structural reforms agreed in the Memorandum on Economic and Financial Policies (MEFP) and held discussions on the Government’s and the National Bank’s MEFP for the next 6-month period. “The mission was pleased to note that performance under the program so far has been positive”- Thomas Richardson said. The Poverty Reduction and Growth Facility (PRGF) is the IMF's concessional facility for low income countries. PRGF loans carry an annual interest rate of 0.5 percent, and are repayable over 10 years with a 5.5-year grace period on principal payments. On May 5, 2006 IMF’s Executive Board approved the PRGF arrangement with Moldova in the total amount of about US$118.5 million, the first tranche of which – about US$17 million – was transferred to the National Bank of Moldova in mid-May 2006. On December 15, 2006 IMF’s Executive Board approved an increase in the size of the loan to about US$167 million. The second disbursement was approved for an amount equivalent to about US$ 48.2 million.