The IMF Approved a New Program of Assistance to Moldova for $ 590 Million

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The Executive Board of the International Monetary Fund approved on Monday a program of assistance to Moldova for $590.6 million (400 million special drawing rights - SDR). It is designed for 40 months. Deputy Managing Director of the IMF Kenji Okamura said after the meeting of the Executive Board that the Moldovan authorities have made “commendable progress in improving the banking sector and strengthening macro-financial stability.” He noted that, despite the successes achieved, the COVID-19 pandemic, the 2020 drought and the continuing rise in world energy prices “slowed down economic activity, increased the risks of deterioration of the situation and complicated the policy-making process in the republic,” reports “Although emergency financial assistance from international partners has been able to mitigate the economic consequences of the pandemic, Moldova remains one of the poorest countries in Europe, with old governance and structural deficiencies that prevent income convergence. Against this background, the IMF-supported programs under the Extended Financing Facility (EFF) and the Extended Credit Mechanism (ECF) pursue three main goals: to support the recovery after the pandemic; to meet the urgent development needs; to strengthen the management system and institutional foundations of the Republic of Moldova,” Okamura said. According to him, the authorities “promptly responded to the negative macroeconomic consequences of the combined shocks, focusing on the necessary measures to support the healthcare system, social assistance programs and business activity. “However, the insufficient implementation of the approved anti-crisis measures related to COVID-19 highlights the need to eliminate the limitations of opportunities. To maintain the economic recovery, a set of measures is needed, including a short-term fiscal policy to carefully balance targeted social assistance and development spending,” the IMF believes. Point