EBRD, Moldovan c-bank agree on local currency loans to coronavirus-hit companies

The EBRD has secured reliable access to leu liquidity in the form of swap transactions up to a total of $30 million (24.7 million euro) and will continue local currency lending to companies to help them mitigate risks related to currency exchange, it said in a press release on Monday.

"The EBRD has long placed a focus on local currency lending especially since the 2008-09 financial crisis, which exposed overdependence on foreign currency borrowing as a major vulnerability in developing countries," EBRD head for Moldova Angela Sax said.

"The Covid-19 pandemic has intensified that vulnerability, which makes meeting local currency financing needs more essential than ever. Through cooperation with the National Bank of Moldova we gained reliable access to leu, which allows us to provide leu-denominated loans to Moldovan clients," she added.

The agreement is part of the EBRD’s stepping up support for local companies as Moldova’s economy is confronted with the impact of the coronavirus pandemic.

Since 2018, the EBRD would have provided 92 million euro in financing to local lenders operating under transparent, reputable ownership and to high standards of corporate governance.

The EBRD is one of the largest institutional investors in Moldova. To date, it has invested around 1.4 billion euro in more than 135 projects in the country to support private businesses, key infrastructure and to build a greener and more sustainable economy.

($=0.8251 euro)