Head of IMF mission expects to continue discussions with Moldovan authorities in coming months

Chisinau, 6 October /MOLDPRES/ - Today, after ending her visit to Moldova, Head of the International Monetary Fund (IMF) Mission Ivanna Vladkova-Hollar said that they expected talks with Moldovan authorities to continue in the coming months. The IMF official added that in the two weeks she was in Chisinau the discussions were constructive and progress had been made in identifying the priorities of the reforms.

"We expect the talks to continue in the coming months, so that authorities have enough time to carry out a number of key strategic commitments, as well as to formulate more detailed proposals related to policies for the year 2016", the head of the IMF stated in a statement.

According to her, “authorities have committed to work actively to strengthen the banking system. They reiterated their commitment to promptly withdraw the licenses and liquidate the three insolvent banks, which had been under special administration since November 2014”.

Stopping any incoming liquidity in the leu currency into the banking system through these banks is crucial to ensure macroeconomic stability which has been so far maintained through a tight monetary policy, Ivanna Vladkova-Hollar said. Meanwhile, “the discussions on the steps to ensure the strengthening of the regulatory framework, the supervisory framework and the framework for crisis management in Moldova will continue”.

The authorities have taken important steps to increase energy efficiency. However, in the mission's view, delaying the adjustment of tariffs generates losses and chain arrears throughout the energy sector. The adjusted prices for electricity, gas and heat should be applied by the beginning of the cold season. It is important that the adjustment of tariffs be accompanied by targeted social assistance, to protect the most vulnerable segments of the population.

Agreeing on resetting the budget deficit to the set level in the medium term will also be necessary, to ensure debt sustainability. This objective will be challenging, given the budgeting of costs related to the liquidation of banks. The IMF mission head’s statement also mentions that discussions on measures and reforms to help achieve the fiscal policy package for 2016 continued.

A team of IMF experts headed by Ivanna Vladkova-Hollar was on a visit to Chisinau on 22 September - 6 October, to initiate discussions within the regular consultations 2015 Article IV Consultation, as well as discussions on policies that could form the basis of an IMF-supported programme.

(Reporter V. Bercu, Editor M. Jantovan)