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BNR's Vasilescu: On her visit to Romania, Christine Lagarde wants to talk to the country
The visit to be paid next week by Managing Director of the International Monetary Fund (IMF) Christine Lagarde is a very special one, but the visit does not entail the signing of an agreement, Adrian Vasilescu, adviser to Governor of the National Bank of Romania Mugur Isarescu told Digi24 private broadcaster.
He said Romania will not conclude any arrangement with the three international institutions - the IMF, the World Bank and the European Commission - to draw money, but to boost its credibility on the international markets.
'It will not withdraw a penny, even if an amount will be mentioned in the agreement. In the previous arrangement, there were 3.5 billion euros, which stayed somewhere in a safe, which Romania could have accessed any time some unforeseeable things would have happened. No such thing happened and no penny was withdrawn from the amount. In fact, the last billion euro of the 20 billion euros in the first arrangement was also not withdrawn. Given the circumstances, if we do not withdraw the funds and if we live in a country that as a rule takes to the international markets to raise money, because the money in the country alone does not suffice to fuel the engines of the economy, it is clear that Romania must have open access to the markets, market entrance and credibility,' Vasilescu explained.
He mentioned that Romania currently has a very big reserve at the central bank of both forex and gold, being able to pay its debt at due time.
'There is some confusion, some memory in our mind that the debt is the country's. When there is talk today of a debt of nearly 90 billion euros, very many say this is Romania's debt, worrying about how it will service it. But this debt is mostly the banks' debt, the debt of privately-owned enterprises, while the Government's debt is modest, easy to service under the given circumstances and this is the part of the guaranteed public debt. If, God forbid, something bad happens, BNR services this debt from interest revenue and the Finance Ministry refunds it,' said Vasilescu.
Managing Director of the International Monetary Fund (IMF) Christine Lagarde will visit Romania on July 15 and 16. This will be the first to Romania since her appointment as managing director of the IMF in July 2011.
The Executive Board of the International Monetary Fund (IMF) has declared the successful conclusion of a second stand-by arrangement between Romania and the IMF, saying that all the important targets and preconditions have been met, while pointing to the progress of Romania toward macroeconomic stability and on the path to structural reforms, Romania's Minister-delegate for Budget Liviu Voinea said late this June in Brussels.
The 24-month precautionary stand-by arrangement (SBA) in the amount equivalent to SDR 3,090.6 million (about 3.5 billion euros, 300 per cent of Romania's quota) came into effect on March 31, 2011.
In 2009, the Executive Board of the International Monetary Fund (IMF) approved a 24-month SDR 11.4 billion (about 12.9 billion euros or 17.1 billion US dollars) stand-by arrangement for Romania to support an economic program designed by the Romanian authorities and intended to cushion the effects of the sharp drop in capital inflows while addressing the country's external and fiscal imbalances and strengthening the financial sector.
Out of it, Romania withdrew seven of eight instalments totalling SDR 10.57 billion (11.9 billion euros). The Romanian authorities decided to treat the eight instalment as precautionary and because of positive macroeconomic developments in the meantime they did not withdraw it.