Press Release No. 16/86

Press Release: IMF Staff Concludes Visit to Moldova

March 1, 2016

An International Monetary Fund (IMF) mission led by Ms. Ivanna Vladkova-Hollar visited Chisinau during February 23–29. At the conclusion of the visit, Ms. Ivanna Vladkova-Hollar made the following statement:

“Discussions with the authorities were open and constructive, and focused on assessing recent economic developments and understanding the authorities’ policies to maintain macroeconomic stability and improve financial sector governance.

“The outlook remains challenging and requires skillful economic management.

“The closure of Banca de Economii, Unibank, and Banca Sociala in late 2015 has stopped the injection of liquidity in the system through these banks and, together with a stabilization of the foreign exchange market and a decline in inflation expectations, has allowed the National Bank of Moldova space for a small reduction in policy interest rates.

“Nonetheless, fiscal policy is constrained in its ability to support domestic activity, particularly until the new authorities elaborate tax and expenditure policies that would strengthen the capacity of the budget to deliver on a developmental agenda.

“Moreover, weak governance in the banking sector is having heavy economic costs. Correcting the long-standing deficiencies in bank supervision is critical to restoring macro-financial stability, and ultimately Moldova’s economic prosperity. In that respect, improved corporate governance and risk assessment in banks can only be credibly achieved with a comprehensive reevaluation of ultimate beneficial owners.

“The discussions will continue over the coming months, giving the authorities time to complete key diagnostics in the financial sector and flesh out their policy proposals in greater detail.”