OREANDA-NEWS. January 12, 2010. As the Prime Minister of Moldova Vladimir Filat has announced, the government has fulfilled all its obligations assumed during negotiations with IMF and expects the Board of Directors of the Fund to approve a new three-year funding of Moldova.

The prime minister said that a new cooperation agreement between the Government of Moldova and the IMF will allow Moldova to get an impressive financial support in the form of grants and loans from other international financial organizations and donor countries.

As it was reported before, on 28 October 2009 the IMF and the Moldovan government agreed on a new three-year funding worth 369.6 million Special Borrowing Rights (approximately US590 million), funded through combination of “stand-by" mechanism (SBM) and extended credit facility (ECF).

According to the agreements, approximately US295 million of the total amount of funds will be used to cover the budget deficit of Moldova; the same amount will be used to maintain currency reserves of the National Bank. The funds to cover the budget deficit the IMF will provide Moldova for the period of ten years with five-year deferment under the interest rate of 0.25% p.a.

The funds for maintaining the NBM currency reserves will be issued for five years with a three-year grace period under 1.3% p.a. The main objective of the new program to finance the IMF is macroeconomic stabilization of Moldova's economic recovery and increase in the social spending in order to protect the poor, on the basis of the conceptual framework of economic and financial policies for 2010-2012.

The program provides reduction in the financial imbalance, which started in late 2008 and continued in 2009, as well as the increase in the budget expenditure on investment and social protection. Thus, the IMF will stick to the three-year program within the financial mechanism of the Poverty Reduction and Growth Facility, approved by the IMF Executive Board in May 2006 which expired in May 2009.

In 2009 Moldova has received from the IMF 117,7 million of the Special Borrowing Rights (approximately US186 million) and used them to cover the budget deficit.