IMF Board To Discuss First Review Of Romania's Agreement Sept 21

The Board of the International Monetary Fund will analyze and file for approval on September 21 the first review of the stand-by agreement with Romania, as well as the request to change certain performance criteria, according to IMF data.

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Romania secured end-March a EUR19.95 billion financial aid from the International Monetary Fund, the European Union and other international institutions to cope with the deepening recession. IMF granted Romania a EUR12.95 billion stand-by loan, as part of the financial package.

An IMF mission led by Jeffrey Franks came to Bucharest early August for the first evaluation of the stand-by agreement.

The IMF released the first tranche of the loan, worth EUR5 billion, in May. The second tranche, worth around EUR1.9 billion, will be released upon the first review's approval.

Romania's 2009 economic contraction is forecast at 8%-8.5% in a new scenario to modify the macroeconomic frame on which the country's agreement with the International Monetary Fund was based.

The IMF has agreed to allow Romania a budget deficit of 7.3% of the gross domestic product in 2009, higher than the 4.6% cap negotiated this spring, due to a deeper-than-expected economic decline.

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