Moody’s: Rating of Romania, unchanged if agreement with IMF is observed

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The analysts of the main rating agencies Moody’s and Fitch said that the observance by the Romanian state of the commitments assumed in the agreement with the IMF is essential for the evaluations they will make, announces daily Business Standard.

The rating of Romania remains stable as long as the Government of Romania will cooperate with IMF and the European Commission, mentioned, for the said daily, Kenneth Orchard, an analyst from Moody’s Investor Service.

Our rating, BB+, with negative prospects, partially singles out our concern that the Romanian politicians could be tempted to take distance from the agreement, Colquhoun said, quoted by Business Standard.
The economic analysts believe that the agreement with IMF diminishes the risks which hover above the economy.

The financial support granted by IMF and EC and the renewed commitment of the nine biggest foreign banks will diminish any risk regarding the foreign financing, added Marion Muhlberger, an analyst with Deutsche Bank, the daily also wrote.

If the Government implements the fiscal policy agreed on with the IMF, the Central Bank of Romania (BNR) could have more space of action, said Christian Keller, senior economist at Berclays Capital, quoted by the publication.

Jeffrey Franks, the head of the IMF mission in Romania said on Monday that Romania will have an economic growth of 0.5-1 percent, in 2010, in the conditions in which the minimum point of the economic fall will be reached in the next two or three quarters.

He recommended the adjustment of the salary expenses in the public system and of the public pensions in the next four or five years, the adoption of the salary laws in the public sector and of the public pensions, four or five years, as well as the introduction of a law of fiscal responsibility.

In a first for the relation of IMF with Romania, 1.75 billion euros, from the 2nd and the 3rd loan tranche, used can be by the Romanian state, for the financing of the budget deficit, Franks also said.

Romania has agreed on a two-year agreement with the International Monetary Fund, for 12.95 billion euros, with the total package of foreign financing, from the IMF, the European Union, the World Bank and EBRD due to reach 19.95 billion euros.

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  1. AlexMcNeil spune

    Romania is one rare example of a Country where it follows the IMF Program in such a comprehensive manner. Romania displays a rarity of reforming consistently and meeting IMF Criteria successfully like Romania has proven.

    I can tell you with my experience in living in Foreign Countries that what Romania has achieved cannot be achieved by many.

    The Government follows through and takes advice and implements these reforms.

    I cannot see this being done in Countries like Ukraine and other Countries I have been too.

    Romania will be remembered by the IMF for this remarkable reform process. Im sure Jeffrey Franks would agree with me.

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