Press Release No. 15/463

Press Release: IMF Staff Statement at the Conclusion of the Mission to Republic of Moldova

October 6, 2015

An International Monetary Fund (IMF) mission led by Ms. Ivanna Vladkova-Hollar visited Chisinau during September 22–October 6, to initiate discussions under the 2015 Article IV consultation and on policies that could form the basis for a Fund-supported program. At the conclusion of the visit, Ms. Ivanna Vladkova-Hollar made the following statement:

“Discussions with the authorities were constructive, and we have made progress in identifying reform priorities. The discussions are expected to continue over the coming months, giving the authorities time to implement a number of key strategic commitments as well as to flesh out their policy proposals for 2016 in greater detail.

“The authorities have committed to move ahead decisively with strengthening the banking system. They have reiterated their commitment to promptly withdraw the licenses and liquidate the three insolvent banks that have been under special administration since November 2014. Stopping any further injection of lei liquidity in the system through these banks is critical to ensuring macroeconomic stability, which has been so far maintained by tight monetary policy stance. Discussions will continue on measures to strengthen the regulatory, supervisory, and crisis management frameworks in Moldova.

“The authorities have taken important steps to increase energy efficiency. However, delays in tariff adjustments are creating cascading losses and debts across the entire energy sector, and revised tariffs for electricity, gas, and heating need to be in place before the start of the heating season. It will be important that tariff adjustment be accompanied by targeted social assistance to protect vulnerable layers of population.

“Agreement will also be necessary on returning the fiscal deficit to its medium-term level so as to ensure debt sustainability. This task will be made challenging by the need to bring the costs of banking sector resolution onto the budget. Discussions on measures and reforms to support the fiscal policy package for 2016 continue.”