Romania Likely To Get New IMF Loan Tranche In Feb

Speaking after a meeting with Romanian central bank governor Mugur Isarescu, Franks said the IMF would probably send an assessment mission to Bucharest in January and the disbursement will be released shortly after, pending a board approval.

The IMF official didn’t rule out the possibility that Romania will receive the third and fourth loan tranches simultaneously, but said nothing was confirmed yet.

Romania and the IMF have reached an agreement on the 2010 budget and the authorities in Bucharest should send the draft to Parliament for approval shortly, Franks said Tuesday.

Early this year, the IMF has agreed to lend Romania EUR12.95 billion as part of a larger package including funds from the EU, the World Bank and other foreign lenders, conditioned by a series of fiscal and economic measures the eastern European country must adopt within a relatively short timeframe.

Romania has received so far around EUR7 billion from IMF in two installments, and was scheduled to get another EUR1.5 billion in December, but the Fund decided to hold the cash until the country has a functioning government and a reasonable budget for 2010.

A team of IMF experts arrived in Bucharest December 14 for a three-day visit to hold technical talks on the 2010 budget.

The core elements Romanian and IMF officials agreed upon include severe spending cuts so that the budget deficit can be brought down to 5.9% of the gross domestic product in 2010, from around 7.3% of GDP estimated for this year, Franks said.