Isarescu: Romania could sustain itself without the IMF

Newsroom 08/05/2014 | 15:48

Mugur Isarescu, governor for the Central Bank of Romania, believes that Romania can sustain itself without an agreement with the International Monetary Fund and retain its credibility, given that the loans have been mostly reimbursed, writes MEDIAFAX.

Asked by the press if he believes that Romania could stand on its own two legs and be credible without an agreement with the IMF, the governor responded: “Yes, I believe that”.

Romania is currently on its third agreement with the IMF, after it initiated the first one in 2009. The current agreement will expire in the fall of 2015 and it is treated by both parties as a preemptive agreement, meaning that the funds provided by the financial institution will not be available after each evaluation.

The discussion regarding Romania’s capacity to get loans on the international capital market and to continue to attract investors without being in an agreement with the IMF is coming up at a time when Romania is preparing a process of fiscal relaxation. The government want sot cut taxes on reinvested profit and reduce CAS by 5 percentage points.

Romania registered an economic growth of 3.5 percent last year, which took everybody by surprise, and adds to its credibility. On the other hand, Isarescu doesn’t believe the economy is evolving well and fast enough to encourage a strengthening of the national coin.

“There will be missing capital, exits from Russia, don’t believe that the Central Bank wants to improve the exchange rate or that I do. I am not convinced that our foundation is that solid or our exports are doing that well. The exchange rate is determined by the market, not by what the governor wants”, according to Isarescu.

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