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Romania reaches 4 billion euro agreement with IMF

July 31, 2013

BUCHAREST, Romania (AP) — Romania has reached agreement with the International Monetary Fund and the European Union for a 4 billion euro ($5.3 billion) precautionary loan.

IMF mission chief to Romania Andrea Schaechter said Wednesday that the government had requested the 24-month standby agreement which it does not plan to draw on. It is shared equally between the IMF and EU, and will act as a backstop in case there’s any turbulence in financial markets. It would be Romania’s third deal with the IMF in five years.

In 2009, Romania secured a 20-billion euro bailout loan from the IMF, EU and the World Bank. The economy is forecast to grow 2 percent this year and 2.25 percent next year.

As part of the agreement, the government will cut health spending and privatize lossmaking companies.

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