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IMF mission, Romanian Gov't concluded talks for letter of intent

A delegation of the International Monetary Fund (IMF) headed by Jeffrey Franks concluded on Saturday talks with Romanian ministries and authorities involved in the drawing up of a letter of intent to a new precautionary arrangement between Romania and the IMF.

The delegation was later on welcomed at the Cotroceni Presidential Palace to inform President Traian Basescu about the outcome of the talks. Upon leaving the Finance Ministry, IMF chief for Romania Jeffrey Franks said excellent progress has been achieved.

The talks started in Bucharest on April 27. The conclusions of these talks, the first that regard the new precautionary arrangement, will be unveiled on May 9, at the headquarters of the National Bank of Romania.

Upon arriving in Romania, Franks said the focal point of the talks will be improving the management efficiency of 18 government-owned enterprises under monitoring in the transport and energy sectors, as well as improving the accessing of European structural funds and the liberalisation of the local natural gas market.

The precautionary arrangement between Romania and the International Monetary Fund entails 3.1 billion SDRs, or 3.6 billion euros, representing nearly 300 percent of Romania's quota in the IMF.

The new arrangement, which came into force on March 31, 2011 is worth around 3.6 billion euros and will last 24 months. It is carried out at the same time with a new precautionary arrangement with the European Union for 1.4 billion euros and a loan agreement worth 0.4 billion euros from the World Bank.

Since this is an agreement of a precautionary nature, the money from the IMF can be drawn only in an exceptional situation, such as an attack on the national currency triggered by a crisis in the region, resulted in a large loss of reserves and of trust, or if the Treasury fails two - three times to get financing at acceptable costs. In these circumstances, the entire amount, of about 3.6 billion euros, which the Fund will make available to Romania based on the new precautionary agreement, is destined to Romania's National Bank (BNR).

Sursa: http://www.actmedia.eu

Tags: billion euros talks romania arrangement precautionary bnr

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