Loading ...Conclusion of an agreement with the International Monetary Fund (IMF) will represent a political, and not a technical decision, chief-economist with the Romanian National Bank (BNR) Valentin Lazea told a banking seminar on Wednesday.
He also specified Romania launched negotiations to contract a foreign loan "not because of a problem existing, but only to prevent a problem" and that it is about in fact of a package of credits, out of which the money from the IMF represent only a part.
He also specified Romania launched negotiations to contract a foreign loan "not because of a problem existing, but only to prevent a problem" and that it is about in fact of a package of credits, out of which the money from the IMF represent only a part.
According to the BNR official, a possible loan from the IMF will be meant only for Romania's international reserve, and not to be injected in financing the budget deficit or the financing of projects. In his opinion, a possible agreement with the IMF will bring three advantages: an increase in the international reserves, an increase in Romania's creditability on the international level and the strengthening of the political will to carry out domestic reforms.
The BNR chief-economist also added there exists another unknown factor related to the destination of the money from the European Commission, as it is not clear yet whether such money will be meant to finance projects or just to finance the foreign balance.
In order to finance existing projects, Lazea indicated as possible sources the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD).
An International Monetary Fund (IMF) mission led by Jeffrey Franks will visit Bucharest, March 11-25.
An International Monetary Fund (IMF) mission led by Jeffrey Franks will visit Bucharest, March 11-25.
The mission that starts on Wednesday, March 11 will continue assessing the macroeconomic situation of Romania, and hold discussions on a potential International Monetary Fund program for Romania. The programme would be part of a pro-active, insurance-based multilateral financing package, to be supported by the European Union and the World Bank, among other international financial institutions.
Romania needs an external loan that will be a safety belt to weather the economic crisis, Romanian President Traian Basescu told a joint meeting on Monday of the Romanian Parliament, explaining that the country may access funds made available by the European Union to the new member states only by concluding a partnership with the IMF.
Romania's representative to the IMF Mihai Tanasescu on Tuesday told a TV broadcast that the financial agreement to be concluded between Romania, on the one hand, and the International Monetary Fund (IMF) and the European Union (EU) on the other, is going to prevent problems, being meant as a measure of safety against difficult times possibly coming.
"In the context of an economic downturn of minus 2 percent in Europe, Romania will also be affected. The discussions with the IMF are thus good for us, in the context of the deceleration of the global economy. IMF means discipline, predictability, putting things in order," Tanasescu said.
He also showed that the agreement should be concluded on 24 months.
He also showed that the agreement should be concluded on 24 months.
Romania;s representative to the IFM explained that the money coming via agreements with international financial institutions are to be directed mainly to cover the deficit in the balance of payments. he also mentioned the loan will be granted at the lowest possible interest rate, of 3-3.5 percent, to be calculated based on the amounts to be taken from the fund, if such amounts are taken.
"The foreign loans is for us to have available a crediting line, to take money when we need them," Tanasescu said.
Financial Times on Monday read Romania might conclude agreement with the IMF for a loan worth approx. 20 billion euros (25.3 billion dollars), with negotiations between authorities in Bucharest and the IMF to be resumed on Wednesday.
Financial Times on Monday read Romania might conclude agreement with the IMF for a loan worth approx. 20 billion euros (25.3 billion dollars), with negotiations between authorities in Bucharest and the IMF to be resumed on Wednesday.
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