IMF to extend aid to Romania

March 25, 2009 at 11:08 AM

WASHINGTON, March 25 (UPI) -- The International Monetary Fund said it was prepared to loan Romania $17.5 billion to rescue the country from an economic tailspin.

The loan, pending approval of the IMF Executive Board, would give Romania a line of credit of $6.75 billion with another $9.7 billion allowed later with funds coming from the European Union, The New York Times reported Wednesday.

The Romanian economy is predicted to contract 4 percent this year, as foreign investments have declined sharply, the Times said.

"The objective of the policy package is to cushion the effects of the sharp drop in private capital inflows," IMF Managing Director Dominique Strauss-Kahn said.

The loan is also intended to assist Romania for its "eventual entry into the eurozone," Strauss-Kahn said.

Romania isn't alone as an Eastern European country seeking assistance in a global recession. Hungary, Belarus, Latvia, Serbia and Ukraine have also sought help recently, the Times said.

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