JIS News

Technical Advisor to the Minister of Finance and the Public Service, Dr. Wayne Henry, has said that the Government’s decision to borrow from the International Monetary Fund (IMF) was the safest and most viable option for the country.
Addressing a meeting of the Kiwanis Club of New Kingston held yesterday (February 24) at the Hilton Kingston, Mr. Henry pointed out that it was difficult to access the international financial market because of the recession and the country’s unfavourable credit rating at the time.
He noted that while there were “offers coming to us at the Ministry from private sector groupings, a consortium of banks out of Europe.the problem with that is, yes, you have to do your due diligence to ensure that there are proper funds, they are compliant in anti-money laundering and counter terrorism financial regulations.”
“Also, if you engage with private parties as a country you open yourself to severe risk that if economic conditions change, you do not have the purview of an IMF, and if you are dealing with a private interest and you fall into issues, they can take actions based on what you sign,” he explained.
He noted further there is safety in borrowing from the IMF as the institution’s mandate is to ensure financial systems stability.
The IMF approved a standby facility of US$1.27 billion for Jamaica on February 4, paving the way for the other multi-laterals to pour in additional credit of some US$1.1 billion.
The agreement immediately released funding of US$1.3 billion from the US$2.37 billion pool of funds earmarked for the Government’s Medium Term Programme over the 27-month period of the agreement.
The funds are broken down as follows: IMF, US$650 million; Inter-American Development Bank (IDB), US$400 million; World Bank, US$250 million; and the Caribbean Development Bank, US$35 million.
Turning to the Jamaica Debt Exchange, which was critical to the Medium Term Economic Programme developed in partnership with the IMF, Dr. Henry said that not only has the initiative reduced the country’s debt servicing obligations, it has also resulted in a significant lowering of interest rates.
“This enables the government to wean itself from its appetite for borrowing and with the lowering rates, it has now made servicing the debt obligation of the Government more affordable,” he stated.

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