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The IMF assistance totaling about $236 million, received by Moldova, will be used to finance state budget needs.

The IMF assistance totaling about $236 million, received by Moldova, will be used to finance state budget needs.

This is provided for by the draft law on the use of special drawing rights allocated to Moldova by the International Monetary Fund, adopted by the Moldovan parliament in the second reading. The document stipulates that SDR 165.33 million (about $236 million) allocated to Moldova through the National Bank of Moldova (NBM) will be used to finance the needs of the state budget. The National Bank will transfer the funds to the Ministry of Finance within the time frame and on the terms established by the agreement, which will be 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. As the Ministry of Finance said earlier, the IMF Board of Governors approved on August 2 this year an additional total distribution to member states of SDR 456 billion, equivalent to $650 billion. The SDR allocation took effect on 23 August. The main purpose of the 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. SDRs are granted to Members without obligation to refund or cancel SDRs. States are not required to fulfill any conditions in order to receive their share of the SDR allocation, respectively, each country can use the funds received in accordance with domestic needs. As noted by the Ministry of Finance, in Moldova, these funds will be used to finance the state budget deficit. In accordance with IMF procedures, each member must pay quarterly interest and annual fees. The SDR interest rate is floating and as of September 20 it was 0.05%, and the annual commission rate (also floating) does not currently reach 0.001%. At the same time, SDRs are cheaper than loans on the market. The costs associated with servicing this distribution of SDRs will be made from the state budget and are provided for in the draft amendments to the Law on the State Budget for 2021. The allocation of SDRs is a gratuitous aid. // 15.10.2021 - InfoMarket

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