IMF Completes Seventh and Eighth Reviews Under the SBA for Romania

Stocks and Financial Services Press Releases Thursday June 27, 2013 08:40
IMF--27 Jun--International Monetary Fund
IMF Completes Seventh and Eighth Reviews Under the SBA for RomaniaPress Release No. 13/234

June 26, 2013 The Executive Board of the International Monetary Fund (IMF) completed today the seventh and eighth reviews of Romania's performance under its economic program supported by a 24-month Stand-By Arrangement (SBA). Completion of the reviews makes an additional amount equivalent to SDR 450.6 million (about EUR520.74 million), available for disbursement, bringing the total resources currently available to Romania under the SBA to an amount equivalent to SDR 3,090.6 million (about EUR3,571.68 million, 300 percent of quota). The SBA was approved on March 25, 2011 (see Press Release No. 11/101) and became effective on March 31, 2011. The authorities are treating the arrangement as precautionary and do not intend to draw under it.

In completing the reviews, the Executive Board approved three waivers for the nonobservance of the performance criteria on net foreign assets of the National Bank of Romania, the general government balance, and the central government arrears, based on corrective actions taken by the authorities.

Following the Executive Board's discussion on Romania, Ms. Nemat Shafik, Deputy Managing Director and Acting Chair, said:

"Romania has successfully concluded the second of two Stand-by Arrangements with the Fund. The economy has stabilized. Core inflation remains low, and the fiscal and current account balances are sustainable. However, growth is weak and downside risks exist. Structural reforms are critical to realizing Romania's growth potential and creating jobs, while continued fiscal discipline is essential to anchor macroeconomic stability.

"Significant fiscal adjustment since 2009 has enabled Romania to exit the EU Excessive Deficit Procedure in June. The government's intention to further reduce the structural deficit at a moderate pace to reach its medium-term deficit objective is appropriate. The budgetary framework will also benefit from the establishment of an effective commitment control system and strict prioritization of public investment which would help to avoid recurrence of arrears. Tax administration and healthcare reform along with tax base broadening measures are also needed.

"Reform of the energy and transport sectors and of state-owned enterprises remains incomplete. The authorities have begun to gradually raise gas and electricity prices and establish a more competitive energy market while taking steps to protect vulnerable consumers. These measures are welcome, but more must be done to reform inefficient state-owned enterprises, including through greater private-sector involvement.

"The monetary policy stance is broadly appropriate. Romania's banking system is well capitalized, but vulnerable to external shocks. Accordingly, the authorities should continue to improve their crisis management arrangements and contingency planning. In particular, further efforts to remove obstacles to the resolution of non-performing loans are needed and corporate governance weaknesses at the new unified financial supervisor should be addressed," Ms. Shafik stated.


Latest Press Release

Fitch Upgrades Thailand#s IRPC to #A(tha)#; Outlook Stable

Fitch Ratings (Thailand) has upgraded IRPC Public Company Limited's National Long-Term Rating and senior unsecured rating to 'A(tha)' from 'A-(tha)'. The Outlook is Stable. Fitch has also upgraded IRPC's National Short-Term Rating to 'F1(tha)' from...

SET hosts exclusive forum for 31 embassies to showcase Thailand investment potential

The Stock Exchange of Thailand (SET) hosted "Embassies @ SET" Forum in Bangkok. The first-ever forum has gathered together 50 diplomatic professionals of 31 embassies in Thailand to gain insights into investment opportunities in the Thai capital market,...

KBank supports Revenue Department in pioneering e-Tax Invoice and e-Receipt service

KASIKORNBANK PCL (KBank) will be the trailbrazer in launching the e-Tax Invoice and e-Receipt service to allow business operators to submit these documents to the Revenue Department with swiftness while also reducing their tax management cost. Ms. Kitiya...

Thai Prime Minister Opens CLMVT Forum 2019 Calling for synergy to transform the region into the new value chain hub of Asia

Thailand's Prime Minister General Prayut Chan-o-cha today officially opened the CLMVT Forum 2019 on 24 June, 2019 at the Renaissance Bangkok Rachaprasong Hotel, and delivered a keynote speech highlighting the forum's theme of "CLMVT as the New Value...

Photo Release: EXIM Thailand Finances Asia Green Energys Investment in Lighter Fleet to Promote Thai Maritime Potential

Mrs. Warangkana Wonkhaluang, Senior Executive Vice President of Export-Import Bank of Thailand (EXIM Thailand), and Mr. Panom Kuansataporn, Chief Executive Officer of Asia Green Energy Plc., recently signed a loan agreement whereby EXIM Thailand provided...

Related Topics