The International Monetary Fund (IMF) staff and the Moldovan authorities have reached a staff-level agreement on an economic reform program to be supported by a three-year Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangements. This would allow Moldova to access about $558 million of financial assistance. The new program will build on progress made under the previous program and strive to support Moldova’s post-pandemic recovery, and advance ambitious institutional reforms.
The IMF mission, led by Ruben Atoyan, held discussions remotely from the IMF Headquarters in Washington, D.C. with the Moldovan authorities during July 7-24, 2020 on an IMF-supported economic program.
“IMF staff and the Moldovan authorities have reached staff-level agreement on an economic reform program to be supported by three-year Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangements. Access under this arrangement is proposed to be set at SDR 400 million (232 percent of Moldova’s quota in the Fund and about US$ 558 million).
The staff-level agreement is subject to approval by IMF Management and the Executive Board. Considerations of the new program by the Executive Board is expected in September, subject to the authorities’ implementation of a number of prior actions, including in areas of the central bank independence, financial sector oversight, and fiscal transparency,” stated Atoyan in a statement issued at the end of the consultations.
According to the same statement, the new ECF/EFF arrangements will help maintain macroeconomic stability, provide an anchor for authorities’ policies to support the post-pandemic recovery, and catalyze external financing from other donors. Moreover, the new arrangement will also strive to advance ambitious institutional reforms aimed at tackling widespread vulnerabilities in areas of fiscal governance, non-bank financial sector oversight, market regulation, anti-corruption, and rule of law.
The IMF mission mentioned that an independent central bank helps macroeconomic stability, supports investor confidence, and protects the financial system—all crucial preconditions for inclusive and sustainable growth. The IMF mission added that it is in the interest of Moldova to preserve the independence of the National Bank and it is also a critical requirement under the new IMF-supported program.
In April 2020, the National Bank received a $235 million loan from the IMF.