The IMF approved a new disbursement of about US$95 million within the existing financing program and approved a new RSF program worth US$173 million for Moldova

Mon, 11/12/2023 - 07:49 |

The Executive Board of the International Monetary Fund (IMF) concluded the fourth review under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements for the Republic of Moldova. This allows for the immediate disbursement of SDR 70.95 million (about US$ 95 million), usable for budget support, and brings Moldova’s total disbursements under the blended ECF/EFF arrangements to SDR 348.5 million (about US$ 466 million).

The Executive Board also approved an extension of the ECF/EFF arrangements by 6 months until October 19, 2025. The Board also approved a new arrangement Under the Resilience and Sustainability Facility (RSF) of SDR 129.375 million (about US$173 million). The RSF will support Moldova’s efforts to strengthen resilience against climate shocks, support energy sector reforms, enhance domestic financial sector preparedness, and mobilize sustainable finance.

Moldova continues to grapple with persistent challenges. ECF/EFF implementation remains strong despite these challenges, with the completion of important reforms related to fiscal governance, financial sector oversight, and the rule of law.

Following the Executive Board’s discussion, Mr. Kenji Okamura, Deputy Managing Director, issued the following statement: “Performance under the ECF/EFF remains strong, despite the complex environment. Spillover’s war in Ukraine continues to weigh heavily on the Moldovan economy. The impact of the energy crisis was partially alleviated with the implementation of effective contingency plans, and progress has been achieved in diversifying energy sources. Inflation decelerated more rapidly than expected, owing to a well-calibrated monetary policy response and a swift decline in food and fuel prices. The rebound is projected to be modest in the near term supported by a pickup in domestic demand. Despite the challenging environment, Moldova has demonstrated resilience and maintained a strong reform momentum. The monetary policy stance is appropriate and should continue to be data-driven and forward-looking”.

It is expected that the next Article IV consultation with the Republic of Moldova will be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.