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IMF approves US$478M loan

Published:Saturday | May 28, 2016 | 11:15 PMSuriname

PARAMARIBO (AP):

Suriname has landed a US78 million loan from the International Monetary Fund (IMF) to boost an economic reform program amid a drop in commodity prices, becoming the second South American country to seek such a bailout in nearly a decade.

The IMF said it will immediately disburse US$81 million as part of a two-year deal announced last Friday that has been met with protests.

Suriname is the first country in South America since 2007 to seek help from the IMF through what's known as a stand-by-arrangement, in which loans are conditioned on a government adopting policies aimed at stabilising its finances and economy. The last country to do so was Peru.

The reform is designed to strengthen Suriname's finances following a drop in prices for its principal exports including gold and oil. The country's main alumina refinery also shut down last year.

The IMF said Suriname faces what it called substantial fiscal deficits and a rundown of international reserves.

"Implementing the structural reform agenda is essential to ensure a prosperous future for Suriname," the IMF said in a statement.

Suriname plans to create a value-added tax and eliminate electricity subsidies as part of the reform, which also seeks to increase private-sector growth and attract more foreign investment.