IDB lends Honduras $76.2 million to boost social spending

IDB lends Honduras $76.2 million to boost social spending

Loans Economy & Policy Honduras Coronavirus Central America

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The Inter-American Development Bank said on Thursday it had approved a $76.2 million loan to help Honduras in its battle against the COVID-19 pandemic, the regional lender said in a statement.

"The budgetary support loan will help finance efforts to contain the pandemic, mitigate its effect on poor households, and promote counter-cyclical policies that will ease the crisis' short-term effect on the economy," the IDB said in its statement. The loan was approved by the bank on Wednesday.

Honduras will use the loan to increase social spending, while also allowing the Central American nation to sustain public finances. It is in line with the International Monetary Fund's stand-by agreement with Honduras that was approved last year, the statement said.

"The aid is structured as a Special Development Loan, to be disbursed all at once. Sixty-five percent of the loan carries a 0.25 percent interest rate and a grace and payback period of 40 years. The rest has an interest rate pegged to the LIBOR, a grace period of three years and a reimbursement period of seven years," the IDB said.

Honduras has nearly 26,000 confirmed cases of the COVID-19 virus with 694 deaths, according to the Johns Hopkins Coronavirus Resource Center.