IMF Staff and the Moldovan Authorities Reached a Staff-Level Agreement

IMF News, July 26, 2016

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An IMF mission, led by Ivanna Vladkova-Hollar, held discussions with the Moldovan authorities in Chisinau from July 5-15, 2016 and subsequently in Washington.
Statement issued July 26, 2016 from Washington, DC by Ivanna Vladkova-Hollar.
Press Release No. 16/365.

IMF staff and the Moldovan authorities 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) arrangement.
Access under this arrangement is proposed to be set at 75 percent of Moldova’s quota in the Fund (SDR 129 million, or about US$ 179 million).
The staff-level agreement is subject to approval by IMF Management and the Executive Board.
Consideration by the Executive Board is expected in October, following the authorities’ implementation of a number of prior actions.

The new ECF/EFF arrangement will first and foremost aim to make swift upfront improvements in financial sector governance and supervision.
The program is intended to play a catalytic role for unlocking donor support to sustain economic development and rests on two pillars:

Policies to ensure macroeconomic and financial stability:
Tackle long-standing vulnerabilities rooted in a nontransparent shareholder structure of the banks and weak supervisory and regulatory framework of Moldova’s financial sector.
Monetary policy will continue to be focused on maintaining price stability in the context of a flexible exchange rate regime.
Fiscal policy will focus on using available margins wisely, to strengthen public investment and support social and developmental objectives.

Structural reforms to facilitate growth:
Program is part of a broader development framework supported by other international partners aimed at setting Moldova on a path of sustainable and inclusive growth.
Structural reforms will aim at improving business climate, attracting investment and enhancing Moldova’s growth potential.
Initial measures will support the authorities’ anti-corruption efforts, sustainable energy policy, and fiscal reform agenda, including reforms to mobilize revenue, enhance the efficiency of expenditure, and reduce fiscal risks.

International Monetary Fund — Press Release No. 16/365, July 26, 2016.