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Economic and Policy Response to Coronavirus

IMF Update on Policy Actions in Romania

The following information is copied straight from the IMF for your convenience. Also, find it here: https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#R

 

Summary: COVID-19 has been spreading across Romania with 5202 confirmed cases and 229 deceased, as of April 9. The government has implemented a range of measures to delay the spread of coronavirus and to support people, jobs, and businesses. This includes declaring national emergency, increased testing, social distancing measures, including the closure of schools and entertainment as well as travel and domestic movement restrictions, and capping prices of fuel and utilities.

 
Key Policy Responses as of April 9, 2020
FISCAL
  • Key tax and spending measures announced so far about 2 percent of 2019 GDP include (i) additional funds for the healthcare system, (ii) covering partially the wages of parents staying home for the period the schools are closed, and (iii) measures to support businesses including covering in part the wages of self-employed and workers in danger of being laid off for an initial period of one month, deferral of utilities payments for SMEs. In addition, the government is providing initial RON10 billions of guarantees—equivalent to 1 percent of GDP—for loan guarantees and subsidized interest for working capital and investment of SMEs. Other measures include faster reimbursement of VAT, suspending foreclosures on overdue debtors, suspending tax authorities’ control, discounts for paying corporate income taxes, and postponement of property tax by three months.

 
MONETARY AND MACRO-FINANCIAL
  • Key measures include: (i) reducing the monetary policy rate by 0.50 percentage points to 2.0 percent; (ii) narrowing the corridor defined by interest rates on standing facilities around the monetary policy rate to ±0.5 percentage points from ±1.0 percentage points; (iii) providing liquidity to credit institutions via repo transactions (repurchase transactions in government securities); (iv) purchasing government securities on the secondary market; and (v) operational measures to ensure the smooth functioning of payment and settlement systems. In addition, the Government has issued legislation that banks will defer loan repayments for households and businesses affected by COVID-19 for up to nine months.

 
EXCHANGE RATE AND BALANCE OF PAYMENTS
  • No measures.

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