Romania's central lender to send letter to IMF today

Publish date: 24-04-2009
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The central bank BNR will send today the letter to the International Monetary Fund (IMF), as the document was signed by both the Finance Minister Gheorghe Pogea and the BNR governor Mugur Isarescu and now pends the fund's approval on May 4.

According to Pogea, similar procedures will be followed in case of the 5 billion euro loan from the European Commission.

However, the finance minister stressed that the Romanian authorities will have to respect an agreement concerning the budget gap and to meet certain established target ranges each three months.

"We agreed with the IMF to maintain the economy within certain deficit targets for each quarter so that at the end of December the deficit will not exceed 24.3 billion lei. We have convened to a budget gap target of 8.3 billion lei for the first quarter of the year, 14.5 billion lei for the second and 18.6 billion lei for the third," explained Pogea.

The finance minister added that, should the deficit exceed the established target, a new budget revision will be applied to adjust revenues and spendings so that the fixed target at year-end is still met.

Companies with majority state-owned capital or those were the state is the sole shareholder will be monitored to improve performances, reduce arrears and increase profitability.

"One of the conditions we have agreed upon with the IMF is that raising salaries for state-owned firms which report a profit needs to be closely tight to increasing labor productivity," he said.

The letter received from the IMF will be made public after it is approved by the board.

The IMF recommended Romanian authorities in a memorandum sent with the official letter over the 20-billion euro loan to keep the budget gap below 14.5 billion lei at the end of the first semester.

The budget deficit should stay at 2.73 percent of gross domestic product estimated at 531.25 billion lei this year. People from the government told NewsIn that the IMF attached to the letter a memorandum with technical data including semester limits required of the budget gap.


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