## IMF Executive Board Concludes Ad-Hoc Review Under the Extended Credit Facility and Approves Augmentation and Rephasing of Access under the Extended Credit Facility and Extended Fund Facility Arrangements for the Republic of Moldova _IMF News, May 11, 2022_ ## Source details **Canonical URL:** [IMF Executive Board Concludes Ad-Hoc Review Under the Extended Credit Facility and Approves Augmentation and Rephasing of Access under the Extended Credit Facility and Extended Fund Facility Arrangements for the Republic of Moldova](https://www.imf.org/en/news/articles/2022/05/11/pr22149-moldova-imf-board-concludes-adhoc-review-under-ecf-and-augmentation-under-ecf-and-eff) ## Other formats - [Markdown version](/en/news/articles/2022/05/11/pr22149-moldova-imf-board-concludes-adhoc-review-under-ecf-and-augmentation-under-ecf-and-eff/index.md) - [Structured JSON version](/en/news/articles/2022/05/11/pr22149-moldova-imf-board-concludes-adhoc-review-under-ecf-and-augmentation-under-ecf-and-eff/index.json) - [Bundle manifest](/en/news/articles/2022/05/11/pr22149-moldova-imf-board-concludes-adhoc-review-under-ecf-and-augmentation-under-ecf-and-eff/bundle-manifest.json) ## Bibliographic details - Published: May 11, 2022 --- ### Key outcomes and summary - The Executive Board concluded an ad-hoc review under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements for the Republic of Moldova on May 11, 2022. - The decision makes about US$144.81 million (SDR 108.15 million) available to Moldova immediately. - Total access under the blended 40-month ECF/EFF arrangements originally approved in December 2021 was increased by about US$260.11 million (SDR 194.26 million) to about US$795.72 million (SDR 594.26 million). ### Financing, disbursement, and program status - Immediate disbursement: US$144.81 million (SDR 108.15 million). - Augmentation of total access: increase by about US$260.11 million (SDR 194.26 million). - New total access under blended 40-month ECF/EFF: about US$795.72 million (SDR 594.26 million). - The program is on track to achieve its objectives of addressing balance of payments imbalances and strengthening governance and institutional frameworks through structural reforms. ### Economic impact of the war in Ukraine on Moldova - Identified channels of spillovers: spike in energy prices, trade disruptions, adverse confidence effects, and indirect impact of sanctions. - Refugee influx: over 400,000 refugees fleeing the conflict have entered Moldova—by far the highest of any country in per capita terms; about a quarter of them currently remain in Moldova. - The immediate disbursement is intended to help meet pressing war-induced balance of payments financing needs. ### Executive Board / Directors’ observations and priorities (as stated by Mr. Kenji Okamura, Deputy Managing Director and Acting Chair) - Commendations and assessments: - Directors commended the Moldovan authorities for strong commitment to the Fund-supported program despite the challenging environment. - Directors noted that spillovers from the war in Ukraine and international sanctions on Russia and Belarus have increased external financing needs. - Fiscal policy and social protection: - Directors welcomed the adoption of the supplementary budget to protect vulnerable households, accommodate refugees’ humanitarian needs and maintain social cohesion. - Directors underscored that strong implementation of the budget envelope and careful monitoring of revenue performance and additional spending pressures will be important going forward. - Directors emphasized that fiscal plans should remain anchored by a strong commitment to debt sustainability. - Given unprecedented uncertainty, Directors welcomed the authorities’ readiness to activate contingency plans, should risks materialize. - Monetary and financial sector policy: - Directors welcomed the central bank’s decisive policy response to increased inflation. - Directors noted that the financial sector has remained resilient despite temporary liquidity pressures. - Going forward, Directors broadly concurred that careful calibration of monetary tightening to balance financial stability and growth objectives will be important. - Further foreign currency interventions should be limited to preventing a disorderly adjustment of the exchange rate and curbing excess exchange rate volatility. - Governance and structural reforms: - Directors commended authorities for keeping the program on track and making good progress on key reforms, including: - Completion of structural commitments on fiscal governance. - Financial sector oversight. - Oversight of state-owned enterprises. - Strengthening anti-corruption legislation. - Directors encouraged continued progress on: - The integrated taxpayers’ register. - The comprehensive tax expenditure analysis. - Reinforcement of the National Bank of Moldova’s institutional autonomy. - Directors emphasized that addressing significant governance weaknesses and institutional vulnerabilities remains critical and welcomed the emphasis on strengthening the rule of law and financial supervision. - Directors noted that continued reforms—if appropriately sequenced and resolutely implemented—will boost productivity, unlock private investment and support inclusive, sustainable growth. ### Definitions and procedural note - Ad hoc review: an ad hoc review between scheduled reviews can be requested by a program country when the increase in the underlying balance of payments problems cannot await the next scheduled review; ad hoc reviews require an assessment by the IMF Executive Board that the program is on track to achieve its objectives. - ECF and EFF purpose: - ECF: provides financial assistance that is more flexible and better tailored to the diverse needs of low-income countries (LICs), including in times of crisis (e.g. protracted balance of payments problems). - EFF: provides assistance to countries experiencing serious payment imbalances because of structural impediments or slow growth and an inherently weak balance-of-payments position. *IMF Press Release No. 22/149 — May 11, 2022.* --- ## References - [Republic of Moldova and the IMF](http://www.imf.org/external/country/MDA/index.htm) - [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [Press Release](https://www.imf.org/en/News/Articles/2021/12/21/PR21393-Moldova) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2022/05/11/pr22149-moldova-imf-board-concludes-adhoc-review-under-ecf-and-augmentation-under-ecf-and-eff_