Finance Ministry: First IMF instalment to be repaid by the Romanian Central Bank – 5 billion euros from its own sources

The first IMF agreement instalment, worth of 5 billion euros, is to be repaid in full by Romania’s Central Bank (BNR) from own sources and not making use of the public’s money. The next instalments will lead to interest economies, according to Romanian Ministry of Public Finance (MFP), Mediafax informs. The announcement comes after Romanian Deputies’ Chamber vice-president Bogdan Olteanu said that Romanian tax-payers will have to support Romania’s debt to the IMF.

The Ministry of Public Finance informs that the first IMF instalment has been requested by BNR to support the payout balance. The 5 billion euros are not subjected to public debt, but are to be repaid from Romania’s National Bank own resources. The first instalment consolidated the country’s foreign currency deposits, leading to the decrease of the minimum compulsory foreign currency deposits for the banks in Romania. This brought more liquidity on the market.

According to the MFP report, 50% of the budget deficit will be financed by using foreign sources, that is loans from the European Commission, the World Bank and part of the next two IMF instalments. This leads to low interest costs. „The interest is estimated at 4%”, MFP claims.

The Deputies Chamber vice-president Bogdan Olteanu (PNL) declared on Sunday that the Romanian PM lied when he said Romanian citizens will not have to pay the IMF debt. According to him, each employed Romanian will have to pay 1,800 euros of the 9 billion euros from the first instalment. He said that „in one single governing year, 2009, the Boc Cabinet has brought Romania into a debt bigger that any other debt in 19 years of democratic governance”.

The Finance Ministry replied, arguing that on June 30 2009, Romania’s public debt increased by 1.5% against the end of 2008, amounting to approximately 14 billion lei, that is 23.3% of the GDP. MFP added that the ex-government got a loan to finance the budget deficit worth of 24.8 billion lei (6.7 billion euros).