The EBRD and NBM will help expand access to loans in local currency through a $ 30 million currency swap for lei loans to businesses.
This was reported by the European Bank for Reconstruction and Development, noting that the EBRD and the National Bank of Moldova are joining forces to mitigate the consequences of the coronavirus epidemic and support viable companies and will promote lending to economic agents of our country in local currency, and further reform behavior is extremely important for increasing EBRD assistance. It is emphasized that Moldovan companies will be able to use loans in local currency offered by the European Bank for Reconstruction and Development and its partner financial institutions, thanks to the agreement with the National Bank. The EBRD will have secure and reliable access to Moldovan lei liquidity in the form of swap transactions totaling up to $ 30 million and will continue lending to companies in local currency to help them mitigate foreign exchange risks associated with exchange rates. EBRD Moldova Head Angela Sax said the EBRD has long focused on lending in local currency, especially after the 2008-2009 financial crisis, which highlighted excessive dependence on foreign currency loans as one of the main vulnerabilities in developing countries. “The Covid-19 pandemic has exacerbated this vulnerability. For this reason, meeting local currency funding needs is more important than ever. Thanks to cooperation with the National Bank of Moldova, we have secured access to liquidity in Moldovan lei, which allows us to offer loans in national currency to Moldovan clients, ”said Angela Sax. According to her, the agreement is part of the increased support provided by the EBRD to local companies, while the Moldovan economy is grappling with the consequences of the coronavirus pandemic. The increase in lending to local businesses by the EBRD through local banks is the result of a significant improvement in the banking sector in 2018. From then until the end of 2020, the EBRD will offer financing in the amount of EUR 92 million to banks in Moldova. The EBRD intends to maintain the same high level of investment, provided that the reforms of recent years are irreversible. The EBRD is one of the largest institutional investors in Moldova. To date, it has invested around € 1.4 billion in 135 projects in the country, supporting private business, basic infrastructure and the development of a greener and more sustainable economy. // 07.12.2020 — InfoMarket.
