Jamaica gets $520 mln in IMF emergency funding

Jamaica gets $520 mln in IMF emergency funding

Debt Corporate & Sovereign Strategy Loans Caribbean Jamaica Coronavirus Bolivia Latin America

The International Monetary Fund (IMF) granted on Friday Jamaica’s request for $520 million in emergency financial assistance to meet urgent balance-of-payment needs caused by the coronavirus pandemic. 

Jamaica successfully completed its precautionary stand-by arrangement with the fund recently.  

The Jamaican authorities have proactively responded to the COVID-19 pandemic,” said Tao Zhang, Deputy Managing director and chair of the executive board. “Nevertheless, despite the authorities’ best efforts, the pandemic is severely impacting the Jamaican economy, as a sudden stop in tourism and falling remittances are generating a sizable balance-of-payment need.” 

In its 2020 World Economic Outlook, the IMF said it expects GDP in Latin American and the Caribbean to fall 5.2% in 2020, and Jamaica’s to fall 5.6%.  In April, S&P Global lowered Jamaica’s credit outlook to negative from stable, and Fitch Ratings revised the country’s sovereign long-term foreign currency rating to stable from positive. 

The financing equals 382.9 million special drawing right (SDRs), or 100% of the country’s quota, and will be disbursed through the IMF’s Rapid Financing Instrument (RFI), the fund said. 

Separately, the World Bank approved on Thursday $254 million for Bolivia in one loan and two lines of credit, one of which is concessional. The financing will be used to fund temporary cash transfers for vulnerable households, the bank said in a statement.  

“This operation aligns with our mission to end extreme poverty and promote shared prosperity and is in the framework of the World Bank Group’s immediate institutional response to the COVID-19 pandemic,” said Marianne Fay, the World Bank director for Bolivia, Chile, Ecuador and Peru. 

The loan, totaling $200 million, has a 24-year maturity, a 14-year grace period, and a six-month Libor rate with a 1.4% margin. The $21 million non-concessional credit line has a 21-year maturity period, an 18-year grace period and a six-month Libor rate with a 1.4% margin. The $33.3 million concessional credit with a 30-year maturity period, a five-year grace period and an interest rates of 1.25% plus the basis adjustment for interest charges.