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Jamaica could have new agreement with IMF in November

Published:Thursday | October 13, 2016 | 4:56 PM

The Office of the Prime Minister (OPM) is reporting that Jamaica could have a new agreement with the International Monetary Fund (IMF) by November.

According to the OPM, Jamaica has reached a new staff-level with the fund for a three-year precautionary stand-by arrangement.

If approved by the IMF Board in November, the proposed precautionary arrangement would replace the current special extended fund facility originally scheduled to end in March next year.

An IMF team led by Uma Ramakrishnan visited Kingston from September 21-30 to conduct discussions on the new successor IMF-supported economic programme.

In a joint statement this afternoon, Prime Minister Andrew Holness and director of the IMF’s western hemisphere department, Alejandro Werner, said if approved by the IMF’s Executive Board about US$430 million would immediately be made available to Jamaica. 

IN PHOTO: Prime Minister Andrew Holness

The total available amount under the proposed 36-month Stand-By Arrangement would be about US$1.7 billion.

"Given the Bank of Jamaica’s comfortable foreign reserves position, the Jamaican authorities have indicated their intention to treat the SBA as precautionary, that is, effectively an insurance policy against unforeseen economic shocks that are beyond the control of Jamaica," the joint statement read.

"This new proposed program, and the important commitment of IMF resources that it entails, is a firm vote of confidence in Jamaica," Holness and Werner said.

In the meantime, the government has committed to the following goals — which the IMF staff team will recommend that its Management and Executive Board support.

(i) re-orient public resource allocation toward infrastructure, social protection, and security-related spending, while transforming the public sector to be more efficient and delivery-focused; 
(ii) modernise the monetary policy framework and build the foundation for an eventual move to inflation targeting;
(iii) bolster the resilience of the financial system; and
(iv) work with the Economic Growth Council to implement initiatives that unlock Jamaica’s growth potential and promote private sector jobs.