Tuesday, March 30, 2010

Romania May Ask IMF for Flexible Credit Line After Loan Expires

By Irina Savu

March 30 (Bloomberg) -- Romania may ask the International Monetary Fund for a flexible credit line or a new “precautionary” standby-loan agreement after its bailout expires next year, President Traian Basescu said.

“From our point of view, we are looking for long-term cooperation with the IMF,” Basescu said at the start of a visit to Romania by IMF Managing Director Dominique Strauss-Kahn.

The Balkan nation, which suffered its worst recession in at least 20 years in 2009, turned to a group led by the IMF and the European Union last year for a 20 billion euro ($27 billion) bailout package to stay afloat. The IMF resumed bailout payments last month to the country after it formed a government and passed a 2010 budget.

The Washington-based lender will discuss “the best course to take” after the bailout program ends next year, Strauss-Kahn said.

Earlier today the IMF chief predicted Romania’s $163 billion economy will expand as much as 2 percent this year. The National Statistics Institute in Bucharest predicted on March 3 that the recession will end as early as this quarter and growth for the year will be 1.3 percent after a 7.1 percent contraction in 2009.

The leu weakened 0.1 percent to 4.0725 per euro as of 12:54 p.m. in Bucharest, while the Bucharest Stock Exchange benchmark BET index fell 0.9 percent to 5988.74.

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