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Jamaica, IMF reach preliminary agreement on 1.7 billion in loans

Xinhua, October 15, 2016 Adjust font size:

Jamaica and the International Monetary Fund (IMF) have reached a staff-level agreement on 1.7 billion U.S. dollars in loans under a 36-months IMF precautionary Stand-By Arrangement (SBA).

According to a joint statement released on Thursday, the first reimbursement of some 430 million U.S. dollars will be immediately available to the country should the agreement is approved by the IMF's Executive Board.

The statement lauded the deal as a firm vote of confidence in Jamaica's commitment over the past more than three years under the existing IMF-supported program.

In 2013, Jamaica and the IMF reached an agreement under the IMF Extended Fund Facility (EFF), where some 932 million U.S. dollars were expected to inject into the debt-ridden economy in a four-year term.

"Fiscal discipline and proactive debt management have helped reduce public debt by more than 25 percent of GDP since the start of the arrangement under the EFF. Macroeconomic stability is becoming entrenched as evidenced by low inflation, the buildup of foreign currency reserves, and a decline in the current account deficit," the statement said.

"Nevertheless, a renewed focus on growth and job creation is needed and the new program is aimed at sustaining macroeconomic stability, boosting employment, raising the living standards of the Jamaican people, and progressively reducing a poverty level that remains too high," it added.

With the renewed support from the IMF, Jamaican government will continue efforts in re-orienting public resource allocation, improving public sector efficiency, modernizing the monetary policy framework, bolster financial system resilience, and promoting private sector jobs, according to the statement.

Both the IMF and Jamaican government believe these measures could help "to unlock Jamaica's growth potential" .

"The Jamaican government's request for IMF support is tentatively scheduled for consideration by the Executive Board in November, at which point the arrangement under the EFF would be replaced with the precautionary SBA," the statement said. Endit