The Executive Board of the International Monetary Fund (IMF) today approved three-year arrangements for the Republic of Moldova under the Extended Credit Facility and the Extended Fund Facility.
With each facility providing an equal amount, the combined financial assistance will be equivalent to SDR 369.6 million (about US$574.4 million) to support the country’s economic program aimed at restoring fiscal and external sustainability, preserving financial stability, reducing poverty, and raising growth.
According to IMF press release, the approval makes an amount equivalent to SDR 60 million (about US$93.2 million) immediately available, with the remainder available in installments subject to semiannual reviews.
The new arrangements follow a three-year program supported by a Poverty Reduction and Growth Facility, which was approved by the IMF Executive Board in May 2006 and expired in May 2009.
The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality.
Financing under the ECF carries a zero interest rate, with a grace period of 5,5 years, and a final maturity of 10 years.
The Fund reviews the level of interest rates for all concessional facilities every two years. The Extended Fund Facility (EFF) carries an annual interest rate equal to the SDR basic rate of charge, and is repayable over 10 years with a 4.5-year grace period on principal payments.