The special financing received by Moldova from the IMF in the amount of about $ 236 million will be used to finance the state budget deficit.
This is provided for by a relevant bill on the use of special drawing rights allocated to our country by the International Monetary Fund, which was approved by the government at a meeting on Wednesday and will be submitted to parliament for consideration. The document stipulates that the funds in the form of Special Drawing Rights (SDR) allocated by the International Monetary Fund to the Republic of Moldova through the National Bank of Moldova in the amount of 165.3 million SDR will be used to finance the needs of the state budget. The National Bank of Moldova will transfer funds to the Ministry of Finance in the form of distributed SDRs, including the rights and obligations arising from them, within the time frame and on the terms established by the agreement concluded by the Ministry of Finance and the NBM within a maximum of 5 days from the date of entry into force of this law. The Ministry of Finance recalled that the IMF Board of Governors approved on August 2 this year an additional total allocation to member countries of 456 billion SDR, equivalent to $ 650 billion. SDR allocation entered into force on 23 August 2021. The main purpose of additional SDR allocation is to help meet the long-term global need to replenish existing reserve assets in a way that avoids economic stagnation and deflation, as well as excess demand and inflation. An SDR allocation provides liquid assets to member countries with no obligation to reimburse or cancel SDRs. Member States are not required to fulfill any conditions in order to receive their share of the SDR allocation, respectively, each member country can use the SDR allocation in accordance with domestic needs. The rate for each member that will receive an SDR allocation is 95.8455025357% of each member's share. According to the Ministry of Finance, respectively, Moldova received 165.3 million SDRs (the equivalent of about $ 236 million), and these funds are planned to be used to finance the state budget deficit. The department clarified that, in accordance with the procedures of the IMF, each member country must pay quarterly interest and an annual commission. The SDR interest rate is floating and as of 20 September 2021 was 0.05%. Herewith, SDRs are cheaper than loans on the market. The costs associated with servicing the SDR will be covered from the state budget. The allocation of SDRs is a gratuitous aid. // 22.09.2021 — InfoMarket
