OREANDA-NEWS. April 14, 2011. The respective Memorandum was signed by the EBRD Representative Office in Moldova Director Libor Krkoska, the National Bank of Moldova’s Governor Dorin Dragutanu and the Finance Minister of Moldova Veaceslav Negruta. Banks, micro-financing organizations and private companies of Moldova will be able to get loans in domestic currency in the amount of up to 10 million euros (USD 14 million) under the program.

It is implemented in ten transition economies, aiming to reduce the dollarization level of economies and the degree of dependence on foreign funding, decrease the currency and economic risks, promote local currencies usage. The Program in Moldova is planned for five years, its total value is estimated at 40 million euros. Libor Krkoska said Moldova had become the second (after Armenia) country to have this funding mechanism launched.

It is successfully realized in the Western Europe. Krkoska emphasized that the EBRD plans to increase the volume of financing within this program, provided that the financial-banking sector is developing in Moldova.

The National Bank Governor Dorin Dragutanu said the Program wouldn’t have an instant effect and wouldn’t change the financial market dramatically. “One of the Program’s goals is to reduce the level of the country’s dollarization. Although, Moldova doesn’t have the worst indicators of crediting in local currency, this program is called on to decrease the currency risks of entrepreneurs, which gain profit in the local currency, to encourage economic agents’ interest in getting loans in the domestic currency and is supposed to promote consolidation of efficiency of the National Bank’s monetary policy”, Dragutanu said, adding that the dollarization level in Moldova in the before-crisis period was 50% and has reduced by 3-5 percentage points over the last 18 months. For comparison, the dollarization level of Armenia and Georgia is 80%.

The Finance Minister Veaceslav Negruta said economic agents would be able to get and repay credits in local currency, and all currency risks would be covered by the EBRD, which has provided a 30 million euro special fund for these purposes.