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Chișinău, the capital of Moldova.

It will make $35.9m immediately available, with the remainder phased according to annual reviews of progress.

The programme’s key objective is to tackle what the IMF called “the urgent governance and stability issues in the banking sector”.

It centres on improvements to the regulatory, supervisory, and contingency frameworks for banks, including through a demonstrated fundamental shift in the enforcement and sanctioning regime.

IMF deputy managing director and acting chair Mitsuhiro Furusawa, said: “The Moldovan authorities have developed a comprehensive programme…to strengthen the economy and address key vulnerabilities.

“The programme aims at reinforcing the recent economic stabilisation and advancing a broad structural reform agenda, particularly in the financial sector.

“Strong commitment to sound policies and a significant improvement in economic governance will be crucial to raising long-term growth prospects.”

Furusawa said there had been significant progress in improving the banking sector’s resilience since the country’s 2014 crisis.

Following work to strengthen legal and regulatory frameworks, efforts should now focus on “effective implementation and timely enforcement actions to end supervisory forbearance in the face of shareholder or manager misconduct”.

Furusawa also called on Moldova to ensure an effective and independent court system and central bank.

The IMF’s analysis of recent economic developments in Moldova said the economy was recovering from the 2015 recession, with growth of 2% expected this year.

Inflation had fallen sharply and the national currency, the leu had stabilised after a sharp depreciation in the first half of 2015. Inflation was expected to remain close to the lower bound of the Central Bank’s target range of 5 ± 1.5% for the rest of the year.