Moldova is hoping to secure a new loan deal with the International Monetary Fund in this September and then receive the first $100 million tranche of the loan, the President of the nation Igor Dodon mentioned on Friday.

The government is on the lookout for external financing for supporting the economy during the turbulence cause due to the coronavirus or COVID-19 pandemic. The government is expecting a 10-year loan that can partially cover this year's budget dicot of the state.

"If the two-week negotiations with the IMF mission are successful... a new three-year $550 million programme will be approved," Dodon said on an official social media feed. Moldova's previous 40-month IMF Extended Credit Facility and Extended Fund Facility arrangements to support its economic and financial reform program were approved in 2016, and the country received about $182 million.

Moldova Hoping to Secure Loan Deal With IMF

IMF
IMF wants to review international monetary system Reuters

One of Europe's poorest countries, Moldova plunged into crisis in late 2014 after it emerged that the equivalent of one-eighth of national output had disappeared from the country's banking system via three banks. Squeezed between European Union member Romania and non-EU Ukraine, Moldovan politics tend to divide those who favor closer ties with the West and those who want strong ties with Moscow.

Dodon said the country aimed to receive 30 million euros from the European Union and would resume talks with Russia on a 200 million euro loan. The Moldovan constitutional court in April blocked the disbursement of this loan, and Dodon, who favors tighter ties with Moscow, accused the opposition of provoking an economic crisis by blocking the receipt of Russian aid.

The opposition says Russia's motivation in providing a loan is to support Dodon, who plans to run for a second term in presidential elections later this year. The current government this month lost its majority in parliament and may be dismissed. Former finance minister Ion Chicu became prime minister in November 2019 along with a new government composed mainly of ministers who support Dodon.

(With agency inputs)