Moldova will Use 165.3 million of Special Drawing Rights, the Equivalent of 236 Million Dollars, Agreed with the International Monetary Fund
Moldova will be able to use the 165.3 million Special Drawing Rights (SDRs), the equivalent of about 236 million dollars, agreed with the International Monetary Fund. The decision was approved by the Parliament on Thursday, October 14, in order to finance the budget deficit.
According to the document, the National Bank of Moldova will transfer to the Ministry of Finance the financial means under the established terms and conditions, based on an agreement to be concluded between the two institutions.
The SDR allocation provides liquid assets to member countries without any repayment or cancellation obligations. Thus, Member States do not have to fulfill any conditionality in order to receive their share of the SDR allocation. Respectively, each member country may use the SDR allocation according to domestic needs.
In accordance with International Monetary Fund procedures, each member country is to pay a quarterly interest and an annual fee. The SDR interest rate is floating and on September 20, 2021, it was 0.05%, and the annual commission rate is also floating and currently, it is about one-thousandth of a percentage.
The SDR allocation is a non-reimbursable source, and the expenses related to their service will be made from the state budget and will be provided in the draft rectification of the Budget Law for 2021.
On September 22, the project was approved by the Cabinet of Ministers. In August, representatives of the Government announced Moldova will benefit from 165.3 million SDRs (Special Drawing Rights), the equivalent of about 236 million dollars, from the International Monetary Fund. The decision was discussed during a meeting of Prime Minister Natalia Gavrilița with Rodgers Chawani, IMF Resident Representative in Moldova.