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The International Monetary Fund (IMF) has approved Jamaica’s application for a four-year Extended Fund Facility (EFF) in the amount of approximately US$958 million.

Making the announcement while closing the 2013/14 Budget Debate in Gordon House, on Wednesday, May 1, Minister of Finance and Planning, Dr. the Hon. Peter Phillips, informed that the first drawdown from the IMF of over US$200 million “should be completed in the next few days.”

The Minister noted that US$90 million of this drawdown will represent direct budget support for the Government, and pointed out that “under normal circumstances, Fund resources are only available for balance of payments support.”

“We are happy that the Fund has agreed to break with custom, though not in an unprecedented way, and devote a portion of the resources to direct budget support, particularly because the support pledged by the other multilaterals will not begin to flow until after this first quarter of the fiscal year,” he said.

The Minister pointed out that the alternative would have been to approach the domestic market in the interim, but due to the concern about “crowding out” the private sector and putting “upward pressure” on interest rates, “we did not favour that option.”

“The inflows from the Fund are reflected in the financing plans for this budget and will add to the commitments already announced by the Inter-American Development Bank (IDB) and the World Bank,” he said.

Dr. Phillips added that the EFF arrangement will now unlock more than US$1 billion of loan support from these multilateral funding agencies.

By Alecia Smith-Edwards, JIS Reporter