Monitoring→Economy→The Socioeconomic Environment

Banking and insurance

External financial position of the Republic of Moldova

According to the latest press-releases of the National Bank, Republic of Moldova’s foreign debt dropped in May by 111.46 million USD and as of May 31, amounted 870.93 million USD. At the end of April direct public debt guaranteed by the state amounted 982.39 million USD (including funds from IMF which as of January 2004 amounted to 140 million USD). Moldova managed to reduce the servicing of its foreign debt after redemption of bills issued in exchange for debts on gas worth 114.5 million USD, at a price of 50.135 million USD.

According to the latest issue of the National Bank’s newsletter “Monetary overview”, as of end of May public debt amounted 794.58 million USD, whereas public debt guaranteed by the state — 76.35 million USD. Sources in National Bank pointed out that yet another 118.62 million USD need to be reimbursed, while appreciation of USD against other currencies has swelled the debt by 7.04 million USD. Hence, arrears to the interest rate payment worth 0.12 million USD have been accrued. As of May 31, 2004 the total amount of arrears including those accrued in the previous years amounted to 26.6 million USD.

Private debt not guaranteed by the state (including arrears on interest payments) amounted to 444.4 million USD at the end of May. Analysts forecast for 2004 a breakthrough in servicing foreign debt, however due to GDP growth and appreciation of Lei against USD the ratio of foreign debt servicing in GDP will drop from 51.5% to 42.9%.

Meanwhile, National Bank’s foreign currency reserves decreased by 39.7 million USD, to 270.75 million USD at the end of May, after National Bank gave a 50 million USD loan to the Government for redeeming bills issued to Gazprom in 2000 in exchange for a portion of the debts accrued throughout 1996 and 1997. In May Chisinau redeemed at a price of 50.135 million USD bills worth 114.5 million USD. On June 17 Parliament approved a credit of 600 million Lei, i.e. 50 million USD, to be granted for this purpose to the Government for a five year period.

In May Central Bank purchased on the domestic market 9.35 million USD and 72.3 million Euro, thereby it managed to somehow counterbalance the situation after issuing the loan. The reserves consist mainly of liquidity and long-term placements — 184.2 million USD, including in other Central Banks — 94.0 million USD and other foreign financial and banking institutions — 90.08 million USD. Securities account for 86.49 million USD. According to National Bank, liquidity and placements in other foreign central banks dropped in May by 24.36 million USD and 25.5 million USD respectively, whereas placements in securities rose by 9.93 million USD.

The goal of the Moldovan National Bank in 2004 is to preserve the international currency reserves “at an acceptable level so as to cover for at least three months import”. After the national currency was put in circulation, National Bank managed to double the foreign currency reserves in 1994–1997, i.e. from 180 million to 365.7 million USD, however after the 1998 Russian financial crisis the reserves dropped 2.5 times, to 143 million USD. Despite the fact that IMF stopped funding Republic of Moldova throughout 1999–2003, funding which to a large extend was used to fill reserves, in five years Central Bank managed to refill the reserves by 150 million USD, by massively purchasing foreign currency on the domestic market (supplied by Moldovan citizens working abroad).

Archive

2011 2010 2009 2008 2007 2006 2005 2004

 

© 2001–2018 Association for Participatory Democracy “ADEPT”
Phone/Fax: (373 22) 21-29-92, e-mail:
Reproduction of the materials is welcomed provided the source is indicated

Created by NeoNet