Transport
Minister Amis To Close Drunk Driving Law
Loopholes
IMF Approves us$735 Million Dollar Loan To
Costa Rica
Costa Rica Safest
Country In Latin America For Second Year In
A Row
Ontario
Students Help Light Up Costa Rica
Uruguay's Vazquez to Costa Rica
Wife’s Passion
for Mel Gibson Runs Out
IMF Approves us$735 Million Dollar Loan To
Costa Rica
The International
Monetary Fund (IMF) said Monday it had approved a
us$735 million dollar standby loan for Costa
Rica to help it weather the global financial
and economic crisis.
The Washington-based IMF said the turmoil
"entails risks to Costa Rica's outlook in
2009 and 2010" but added that it was not
facing immediate balance of payments
pressures.
The 15-month stand-by arrangement, approved
by the IMF executive board on Friday, was
designed to bolster confidence in the
Central American country's policy framework,
it said.
"The Costa Rican authorities intend to treat
the arrangement as precautionary, meaning
that they do not intend to draw on the
Fund's resources unless a need arises," the
IMF said in a statement.
The IMF said that access to its financial
support would "increase considerably the
country's external financial defenses to
help absorb any larger-than-anticipated
balance of payments shocks and safeguard the
ongoing gradual transition to greater
exchange rate flexibility."
Murilo Portugal, IMF deputy managing
director, said while Costa Rica's economic
fundamentals were "solid," the global
financial and economic turmoil "entails
risks" to its outlook this year and in 2010.
Portugal said that Costa Rica's economic
strategy would involve a gradual increase in
exchange-rate flexibility supported by
monetary restraint, a moderate fiscal
expansion, a further strengthening of the
financial sector, and the mobilization of
substantial precautionary financing,
including from the World Bank and the
Inter-American Development Bank.
"This financing will boost the economy's
foreign currency liquidity buffers, and
provide protection against any
larger-than-anticipated shocks to the
balance of payments," Portugal said.
The IMF also said that Costa Rica's banking
system was "generally strong" with banks
"not exposed to structured financial
products."
The global financial crisis was triggered by
a US home mortgage meltdown that led to
securities linked to the mortgage market
going sour.
Access to IMF financing will boost Costa
Rica's foreign currency buffers and protect
the economy from possibly
larger-than-expected balance of payments
shocks.
"The accord backs the (government's) economic policy strategy to face the
unfavorable effects of the global crisis,"
said Costa Rica's Central Bank President
Francisco de Paula Gutierrez.
It will also help safeguard the transition
to greater exchange rate flexibility, the
IMF said in a statement.
"The authorities' economic program seeks to
preserve macroeconomic and financial
stability, while supporting growth and
protecting the most vulnerable segments of
the population," the IMF statement said. |
|
|
|
|
