Jamaica Passes IMF Test

Jamaica has successfully met all the quantitative performance criteria of the International Monetary Fund (IMF), for the March 2010 test date.
The IMF team, which was in Jamaica carrying out a review of Jamaica’s performance under the Stand-By Arrangement (SBA) with the Fund, has found that Jamaica’s performance up to March 31 was better than anticipated.
Based on the performance of the economic programme, the team announced that it would be recommending that the IMF Executive Board completes the First Review of the SBA, which will result in the disbursement of 63.7 million Special Drawing Rights (SDR). The Board is expected to meet before the end of June.

Minister of Finance and the Public Service, Honourable Audley Shaw (second right), explains the factors behind Jamaica’s favourable performance up to March 2010, under the Stand-By Arrangement with the International Monetary Fund, at a press briefing at the Ministry of Finance and the Public Service, Heroes Circle, today (May 18). Seated beside him are the International Monetary Fund (IMF) Mission Chief to Jamaica, Trevor Alleyne (left), and Financial Secretary, Dr. Wesley Hughes (right).

The team has been in Jamaica since May 4 examining the performance criteria, set out in Jamaica’s Letter of Intent. These targets were fiscal consolidation and institutional reform, public debt restructuring, and financial sector reform.
At a press briefing today (May 18), at the Ministry of Finance and the Public Service, Heroes Circle, Chief of the Caribbean division of the IMF, Trevor Alleyne, announced that “all quantitative performance criteria for the end of March 2010 test date were met, without the need for waivers, and substantial progress was made on the structural reform agenda.”
Minister of Finance and the Public Service, Hon. Audley Shaw, stated that the higher than expected participation rate in the Jamaica Debt Exchange (JDX), helped the country to yield larger-than-anticipated savings on the Government’s interest bill.
“In the period following the debt exchange, credit rating agencies upgraded Jamaica’s sovereign debt rating. Eurobond prices on sovereign bonds have rallied and the Treasury Bill rates have fallen to around 10 per cent.a 28-year low in Government Treasury Bill rates,” he said.

Minister of Finance and the Public Service, Hon. Audley Shaw (right), pays keen attention as the International Monetary Fund (IMF) Mission Chief to Jamaica, Trevor Alleyne, makes a point during a press briefing regarding the review of the Stand-By Arrangement between the Government and the IMF, today (May 18) at the Ministry of Finance and the Public Service, Heroes Circle.

Mr. Shaw also disclosed that no financial institution has so far accessed the Financial System Support Fund, as there were no reports of entities facing capital or liquidity shortages as a result of participation in the JDX.
With regard to the structural targets, the Finance Minister said key benchmarks were achieved, including parliamentary approval of a Fiscal responsibility Framework in March; the preparation of a draft concept paper for an omnibus banking law and reforms to enhance financial sector oversight; and the divestment of Air Jamaica.
Pointing to the global economic environment, Mr. Shaw said that although the prospects for growth have been improved, they were still weak and, therefore, vigilance would be required to ensure that the objectives under the agreement are met.
The IMF Mission Chief also agreed with the Minister’s assessment, saying that risks to the programme remain high, but that continued implementation of the programme would help to boost investor confidence.
“The mission has been impressed by the level of commitment by the authorities to the economic programme and by the broad social consensus, that was crucial to making the JDX a success. Going forward, this partnership between the public and the private sector will be vital to the programme’s continued success,” Mr. Alleyne said. Meanwhile, the Ministry and the IMF team have agreed on an updated draft Letter of Intent, which is to be approved by the Cabinet and the IMF’s management. Mr. Shaw said the document would be placed on the Bank of Jamaica’s and the Ministry’s website, once it has been finalised.