The International Monetary Fund reached an agreement Tuesday with Moldova for a $179 million, 3-year loan arrangement conditional on the government carrying out reforms.

The IMF said its staff members have reached a “staff-level agreement on an economic reform program” with Moldovan authorities to be supported by the credit facility.

Moldovan Prime Minister Pavel Filip told The Associated Press the news “brings back optimism at home and helps restore our credibility abroad.”

Pavel Filip, Prime Minister of Moldova

Filip added his government remained committed to European reforms and was “keen to attract foreign investment: in this sense we undertook a series of economic and banking reforms, which provide the basis for future sustainable growth.”

The IMF mission, led by Ivanna Vladkova-Hollar, held discussions with Moldovan authorities in Chisinau during a 10-day visit this month. To access the funds, the government needs to improve the business climate, carry out fiscal reforms and ramp up the anti-corruption fight.

The news is a boost to the government, in office since January, in one of Europe’s poorest nations. The IMF left Moldova in September 2015, saying it would not negotiate a new loan program with Moldova, following weeks of protests and the resignation of the central bank governor over the disappearance of some $1 billion from three Moldovan banks before parliamentary elections in 2014. This winter, Moldova needed emergency food aid from neighbor Romania.

The agreement needs to be approved by the IMF Management Board, which will meet in October.

The New York Times

26 July, 2016