14th November 2022, Skopje – Draft Law, as per which, up to EUR 530 million will be made available to the Republic of North Macedonia via IMF Precautionary and Liquidity Line was today supported in the Financing and Budget Parliamentary Commission. Minister of Finance, Fatmir Besimi elaborated the proposed legal solution to the members of the Commission, whereby the provision of these funds is yet another IMF’s affirmation of the sound policies pursued in our country.
“Making the funds available via PLL is part of the aspirations of the Government of the Republic of North Macedonia and the Ministry of Finance in these times of crisis, when the costs for providing funds under the most favorable terms and conditions on the capital markets, are high. Under the Law, it is stipulated for the Republic of North Macedonia to be made EUR 530 million available, with EUR 110 million to be disbursed by the end of the year, while EUR 155 million is planned to be disbursed the next year. These funds are aimed at dealing with the consequences of the energy crisis, as well as providing support to the citizens and the business sector, being most needed in the upcoming winter”, Minister Besimi pointed out, thereby adding that this is the exact reason why this legal solution needs the Parliament’s support.
Minister stressed that the Precautionary and Liquidity Line was put in place in 2011, being intended for the IMF member states with sound economic fundamentals and a track record of implementing sound policies, as a tool to meet countries’ diverse needs when they confront certain risks.
Purpose of PLL, as the Minister added, is effective crisis prevention for the IMF member states with sound economic fundamentals, i.e. policies.
“The core of the qualification assessment process is that the member country has sound economic fundamentals and institutional policy frameworks, implements and has a track record of implementing sound policies and remains committed to maintaining such sound policies in future.
According to the Minister, the goals for which the funds are intended and the terms and conditions under which they are provided are yet another strong point in favor of this legal solution, i.e. by making them available, the country facing a major shock triggered by the global energy and price crisis, will be able to deal therewith.
IMF board will approve these funds by the end of this month. They are foreseen to be used in the next 24 months. Repayment of borrowed resources are due within three years and three months of the disbursement. Current interest thereon ranges between 3.66% and 4.66%.
This is just one of the ways in which the financing of the budget deficit was ensured this year. Model applied by the Ministry of Finance and the Government provided for making interest saving worth EUR 40 million per year.