European top bank's programme of loans in Moldovan currency launched

BNM Governor Dorin Dragutanu said that the EBRD\'s financing is important as it limits currency risk.

The European Bank for Reconstruction and Development (EBRD), the Finance Ministry and the National Bank of Moldova (BNM) signed a memorandum of understanding on the launch of an EBRD programme of loans in Moldovan currency (lei).

The eligible banks, micro-financing institutions and private enterprises will be able to borrow loans in Moldovan lei worth ten million euros (14 million dollars).

The EBRD Board of Directors approved the programme in February 2011, in order to reduce currency risks and the dependence on foreign financing. These risks were seen as the main vulnerable points in the region where the EBRD operates during the world financing and economic crisis. The EBRD resident representative in Chisinau, Libor Krkosca, has told MOLDPRES that the bank created a fund of 30 million euros to cover eventual currency risks.

"We hope that this mechanism will help reduce the interest rates on the credits in Moldovan lei and will drive the interest rates closer to the ones applied on the loans in foreign currency," the EBRD representative said.

A press release issued by the European Bank for Reconstruction and Development says that the EBRD director-general for Turkey, Eastern Europe, Caucasus and Central Asia, Olivier Descamps, said: "We are happy to back the objectives of the Finance Ministry and the National Bank of Moldova to reduce the dollarization and promote the national currency's use in line with the EBRD's initiative."

BNM Governor Dorin Dragutanu said that the EBRD's financing is important as it limits currency risk. "There are economic agents that take credits in foreign currency and have incomes in lei. Therefore, if the exchange rate sharply rises, it is very difficult for them to return the borrowed money," Dragutanu said. The EBRD programme of loans in the national currency "will provide additional support to the BNM's efforts to diminish the economy's dollarization and will contribute to continuing the efficiency of the National Bank's monetary policy," Dorin Dragutanu added.

So far, the EBRD has invested over 460 million euros in diverse economic sectors in Moldova and additionally mobilized investments worth 320 million euros. In 2010, the EBRD's overall investments amounted to 97.4 million euros, which accounts for 2.5 per cent of Moldova's Gross Domestic Product.

Moldpres

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