Tuesday, March 24, 2009

Romania agrees 20 bln euro aid deal with IMF-source

BUCHAREST, March 24 (Reuters) - Romania and the IMF have agreed on a budget deficit target of 4.6 percent of gross domestic product for 2009, in an IMF-led loan package worth 20 billion euros, a source close to talks said on Tuesday.

'Both sides agreed on a deficit goal of 4.6 percent of GDP. This is because of the Fund's estimation of a 4 percent contraction for the Romanian economy,' a senior ruling coalition official who saw the draft letter of intent told Reuters.

The official, speaking on condition of anonymity, said the overall package which will include funds from the IMF, the European Commission and other financial institutions would be worth 20 billion euros.

Romania needs billions of euros to fund its bloated current account deficit, plug a budget shortfall and avoid a financing crisis as the global credit squeeze chokes off funding for an economy reliant on foreign cash.

Prime Minister Emil Boc said his centre-left cabinet will likely approve the official letter requesting the aid package on Wednesday. The letter will be discussed in an IMF board meeting on May 4.

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