IMF Executive Board approved US$178.7 million Arrangements under the Extended Fund Facility and the Extended Credit Facility for the Republic of Moldova yesterday.

In a press release from IMF is mentioned that the Fund approved three-year arrangements under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) with the Republic of Moldova to support the country’s economic and financial reform program.

Therefore, the cumulative access under the arrangements is about US$178.7 million, or 75 percent of the Republic of Moldova’s quota in IMF.

"About US$35.9 million will be made available to the Moldovan authorities immediately following the approval of the arrangements. The remaining amount will be phased in over the duration of the program, subject to five semi-annual program reviews," is pointed out in the IMF press release.

The key objective of the program is to tackle upfront the urgent governance and stability issues in the banking sector. The program is thus centered on a successful rehabilitation of systemically important banks and radical improvements to the regulatory, supervisory, and contingency frameworks for banks, including through a demonstrated fundamental shift in the enforcement and sanctioning regime. The financial sector has been under stress for a number of years now, and a key priority would be to bring about an exit from the crisis, so that banks can resume normal financial intermediation.

The program is also expected to catalyze significant support from external donors.

Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair of the yesterday discussion, declared that "the Moldovan authorities have developed a comprehensive program—to be supported by a three-year arrangement under the Extended Fund Facility and the Extended Credit Facility—to strengthen the economy and address key vulnerabilities."

"The program aims at reinforcing the recent economic stabilization and advancing a broad structural reform agenda, particularly in the financial sector. Strong commitment to sound policies and a significant improvement in economic governance will be crucial to raising long-term growth prospects," added Mitsuhiro Furusawa.