Romania To Receive Next IMF Loan Tranches In Sep, Dec

Romania and the IMF closed in May a EUR12.95 billion (11.443 billion Special Drawing Rights – SDR) two-year stand-by arrangement. The first tranche, worth of SDR4.37 billion, was released after the IMF Board approved the loan.

In September, Romania may attract SDR1.718 billion, while the December drawing is worth of SDR1.409 billion.

In 2010, Romania may draw four tranches, in March (SDR766 million), in June (SDR768 million), in September (SDR769 million), and in December (SDR769 million).

The last installment worth of SDR874 million is set for March 2011.

A SDR is a reserve asset created by the IMF, with a currency value determined daily, based on currency market rates of four major currencies. Currently, a SDR is worth around EUR1.1.

When a member draws on the IMF’s resources, it does so by purchasing SDRs or other members’ currencies in exchange for its own currency. The IMF’s general resources are, by nature, revolving: purchases (or drawings) have to be reversed by repurchases (or repayments) in installments within the period specified for a particular policy or facility.

Starting in September 2009, Romania’s purchases will depend on the completion of a review, the IMF said.

The IMF loan is part of a EUR19.95 billion financial support package agreed by Romania with the Fund, the European Commission and other international institutions.