Apr 2013 Financial News

IMF board to consider bigger loan to Jamaica

Apr 09, 2013

THE management of the International Monetary Fund (IMF) said that it will add US$200 million to the Extended Fund Facility (EFF) for Jamaica.

It also plans to recommend the approval of the US$958 million arrangement to its board, which is expected to meet on the matter at the end of April, according to a press statement issued yesterday afternoon.

"The fund welcomes the progress that has been made in the implementation of the programme thus far, including the authorities' efforts to complete the prior actions and structural benchmarks, and on the assembling of a financing package," said the press release.

"The success of this programme crucially depends on full and timely policy implementation by Jamaica of a co-ordinated set of reforms to strengthen the public finances, restore debt sustainability, enhance growth, and bolster the resilience of the financial sector."

In a conference call yesterday morning, the IMF said that the disbursement of funds, which would be subject to approval, would be front loaded, which means that the cost and benefits would be concentrated in the early part of the loan period.

Meanwhile, the net international reserves, which the EFF is meant to support, fell to US$884.25 million, representing 11.49 weeks of imports at the end of March, from US$939.5 million (11.92 weeks of imports) at the end of February.

The international benchmark, below which foreign reserves are deemed to be low, is 12 weeks.

In February, the IMF mission had reached a staff-level agreement with the Government, which would be supported by a 48-month arrangement under the EFF in the amount of about US$750 million or 175 per cent of quota.

Then, the management believed that the arrangement would reach the IMF's executive by the end of March.

And while the end of March date was missed, the quota has been raised to 225 per cent.

"Since the conclusion of a staff-level agreement with the Jamaican authorities in February on an economic programme that can be supported by the fund, the authorities have submitted documentation to the IMF to confirm that all prior actions have been met," said the IMF.

The IMF has also engaged with the Government's development partners on the financing for the programme, including through important contributions from the Inter-American Development Bank and the World Bank.


Source:
Jamaica Observer
Tuesday April 9, 2013

http://www.jamaicaobserver.com/news/IMF-board-to-consider-bigger-loan-to-Jamaica_14016484#ixzz2Pz1S2bMM