The Board of the International Monetary Fund (IMF) recently approved the fifth revision of the agreement with Romania, giving another EUR 519.4 million tranche and bringing the total resources that are currently available to Romania to about EUR 2.67 billion, under a program supported by a 24-month Stand-By Arrangement. The value of the total loan is EUR 3.7 billion.

The Executive Board also approved a waiver for the nonobservance of a performance criterion on the stock of central government and social security arrears.

“Romania’s economic performance under the program remains strong. GDP growth is projected to pick up in the second half of the year, inflation remains in check, and the fiscal and external positions continue to improve. However, with external downside risks looming large, a steadfast implementation of all program commitments, including structural measures, is needed to preserve macroeconomic stability and boost potential growth,” said Nemat Shafik, Deputy Managing Director and Acting Chair with IMF.

The Government is asked for a strict discipline on expenses, reforms in energy and transport. Romania's banking system remains vulnerable to external crisis and the authorities should strengthen supervision and intervention tools, according to the IMF.

Under the agreement, Romania would have to speed up and prepare the sale of 10 percent of Nuclearelectrica by the end of the year.

On June 14, the World Bank approved a memorandum of understanding with Romania after which the institution has provided a credit line of EUR 1 billion for the country.

Ioana Toader, ioana.toader@romania-insider.com