Romania borrows EUR 1 bln from International Bank for Reconstruction and Development to strengthen reserves
2012-09-12 11:20:09
Romania is to borrow a billion euros from the International Bank for Reconstruction and Development (IBRD), part of the World Bank organization. Minister of Finance Florin Georgescu and World Bank country director for Romania and Hungary Francois Rantrua signed the deal today (September 11 ), according to a statement released by Romania’s Finance Ministry.
The Finance Ministry has no plans to spend the money, calling the loan a precautionary measure. The loan is due for repayment in a single (bullet) installment in 2024. Interest, at the current rate, will be 1.11 percent, payable twice a year.
The loan was contracted to strengthen Romania’s reserves, according to the Ministry of Finance, and should send a positive signal to international markets on the country’s financial credibility. The loan carries conditions, which include commitments to fiscal reforms, similar to those set by the European Commission, International Monetary Fund and World Bank standby agreement with Romania.