July 27 (SeeNews) - The International Monetary Fund (IMF) said it will lend Moldova $179 million (162.4 million euro) under a crucial for the country three-year economic reform programme, for which a staff level agreement was reached.
"The new ECF/EFF arrangement will first and foremost aim to make swift upfront improvements in financial sector governance and supervision," the IMF said in a statement late on Tuesday.
The new program will play a catalytic role for unlocking donor support to sustain economic development and rests on two pillars: policies to ensure macroeconomic and financial stability and structural reforms to facilitate growth, it added.
The staff level agreement is subject to approval by IMF management and the executive board, which is expected to meet in October, following the authorities’ implementation of a number of prior actions.
"It is an important step for the economic credibility of Moldova, as our reforms in recent months are validated and further steps to modernize the country are following. Reforms continue and will result in a decent living for our citizens," Moldova's prime minister Pavel Filip said in a separate statement.
A working mission of the IMF visited Moldova between July 5 and 15. After the visit ended, Filip said that Moldova will receive only a $25 million loan from the IMF.
"We were not expecting huge amounts of money from the IMF. For us, their expertise and recommendations for an efficient government matter more," the prime minister said at the time.
In August, the country will get the first tranche of a 150 million euro loan from Romania for salaries and pensions, which was approved in May, but was conditional on a deal with the IMF.
Besides these two loans, Moldova will receive another two loans of 45 million euro each from the World Bank and the European Union, the prime minister also said.
In April, the IMF said it expects Moldova's economy to expand by 0.5% in 2016, revising down an earlier projection for 1.5%Romanian president Klaus Iohannis approved the disbursement of a 150 million euro loan to Moldova for salaries and pensions, but the transfer of the loan's first tranche is growth this year. For 2017, the fund sees the country's GDP growth at 2.5%, it said in its latest World Economic Outlook report.
Moldova has been trying to cope with a major banking crisis since about $1 billion (907 million euro) went missing from three local banks in November 2014. The banks - Banca de Economii, Banca Sociala and Unibank were liquidated.
($= 0.9078 euro)