PM Boc: The next installment of the external loan is expected in September

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Prime Minister Emil Boc has voiced optimism over the disbursement of the second tranche of the external loan secured by Romania, saying that the money is expected to reach the country this September.

‘I believe that the second tranche will be disbursed, because, as the International Monetary Find and the European Commission mentioned on Monday Romania met the pledges under the stand¬by arrangement it signed, in the first six months of the year.

That is why the revision we performed with utter strictness is one that reflects responsibility and seriousness, on the one hand, and political will to do what is needed to be done, on the other,’ Boc told a news show hosted by the national television channel.

He reiterated that out of the loan of nearly 20 billion euros, Romania has so far received 5 billion euros, which were paid into the accounts of the National Bank of Romania (BNT) to be used for the consolidation of Romania’s forex reserves and to effect a cut in the mandatory reserves.

A further 1.5 billion euros came from the European Commission for the Finance Ministry. A new tranche worth 1.9 billion euros from the IMF is expected in September.

‘Normally, this money was to go to the BNR. But, in all likeness, this money will reach the Government to rectify its deficit. BNR has now enough forex reserves to both bolster the local currency and cut the mandatory reserves,’ said Boc.

The prime minister added he will steer the money to areas such as infrastructure, to co- finance European projects, to pay the debts of the local administration to corporations as well as to provide additional money for the unemployment and pension.

On the other hand, Boc admitted that the IMF has readjusted its projections about Romania’s economic state and that the Government deficit will have to be adjusted accordingly.

‘The cheapest money we can borrow is from the IMF, and that is why we prefer borrowing for small interest rates so as not to burden the country in covering the deficit,’ said Boc.

Boc also assured that wages and pensions will be paid in due time, particularly for the categories that are at the base of the social pyramid.
‘We are in no grave state as not to be able to pay the wages and pensions in due time,’ Boc assured.

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