May 12 (SeeNews) - The International Monetary Fund (IMF) said it approved an immediate $144.8 million (137 million euro) disbursement to Moldova to help the country meet pressing war-induced balance of payments financing needs.
IMF's board also agreed on boosting funding for Moldova by $267 million to help the country cope with the impact of the war in Ukraine and surging international energy and food prices, the IMF said in a press release on Wednesday.
Thus, the 40-month Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements reached a total value of $795.7 million.
Spillovers from the war in Ukraine are affecting the Moldovan economy through a variety of channels, including a spike in energy prices, trade disruptions, adverse confidence effects and the indirect impact of sanctions, the international lender said.
According to the IMF, already over 400,000 refugees fleeing the conflict have entered Moldova—by far the highest of any country in per capita terms. Most have since transited to other countries, but about a quarter of them currently remain there. The immediate disbursement will allow Moldova to meet urgent balance of payments financing needs arising from these shocks, the IMF noted.
"Directors commended the Moldovan authorities for their strong commitment to the Fund-supported program, despite the challenging environment. They noted that the spillovers from the war in Ukraine and international sanctions on Russia and Belarus, including trade disruptions, higher and more volatile energy prices, and the continued influx of a large number of refugees, have had a significant impact on Moldova and led to increased external financing needs," IMF deputy managing director and acting chair Kenji Okamura said.
In March, Moldovan prime minister Natalia Gavrilita announced that the government has requested the IMF to review its current funding agreement so that the arrangement reflects the new economic context.
($ = 0.9472 euro)