Romania To Get 2nd Tranche From IMF Very Soon – PM

„The second tranche from the IMF will arrive in Romania very shortly and half of the funds will go to the central bank and the other half to the State Treasury to finance the budget deficit; the same will go for the third instalment, in December,” Boc told a Cabinet meeting.

The government met Tuesday to approve the second tranche of a EUR13 billion stand-by loan Romania has secured from the IMF back in the spring, as well as an additional letter of intent to the agreement.

The IMF’s Board on Monday granted Romania access to EUR1.85 billion of its loan, bringing the total disbursements to EUR6.85 billion so far.

According to Boc, the IMF’s decision acknowledged Romania’s progress in meeting the terms of the agreement.

Romania agreed in spring with the IMF on a EUR12.95 billion loan as part of a financial package totaling EUR19.95 billion, which includes funds from the European Commission and other international institutions.

The third tranche of the loan, worth of EUR1.5 billion, should be released in December, after the second quarterly review of the loan arrangement.

In August, after the first review of the program, Romania and the IMF agreed to adjust some targets, such as allowing a higher budget deficit cap, from 4.6% of the gross domestic product to 7.3% of the GDP, due to a deeper-than-expected economic contraction. Romania’s GDP is currently estimated to fall 8%-8.5% in 2009.