“Last year Jamaica and the IMF came to an agreement for the IMF to continue to maintain an office in Kingston for two years. This has facilitated a close and open working relationship with frequent exchange of views and information. In particular, I have been in regular communication with the Fund over the past few months as the Covid-19 pandemic has grown in intensity.
Yesterday, on behalf of the Government of Jamaica, and in my capacity of Minister of Finance and the Public Service, I requested access to the IMF’s Rapid Financing Instrument.
The Rapid Financing Instrument (RFI) provides rapid financing to IMF member countries with balance of payment needs but without the requirement of having a full-fledged IMF programme, ongoing reviews and conditionality.
Last week, on April 6, the IMF substantially increased the amounts that member countries could access under the RFI window.
Jamaica enjoys a reasonable stock of foreign reserves and we have contingency financing options that arise from (i) the availability of cash resources programmed for accelerated debt repayment (ii) the availability of domestic sources of financing and (iii) untapped capacity available from other multilateral institutions such as the CDB, IDB and the World Bank, including by redirecting existing projects.
Despite these mitigating factors, which provide the ability for Jamaica to absorb economic shocks, the duration of the “global lockdown” is highly uncertain. The open-ended nature of the pandemic and its economic spillovers therefore pose intolerable balance of payments risks to Jamaica that threaten the economic gains of our seven-year reform effort.
For these reasons we believe it is prudent to access and have these resources available. The RFI, as the name suggests, should result in a quick disbursement, in a matter of weeks.
In the interest of transparency around our RFI request, I have taken the decision to release the letter to the IMF Managing Director now, at the time of the request. The letter is included as an attachment to this release.
Jamaica, like many other countries around the world, will experience a sharp decline in economic activity as a result of the Covid-19 pandemic. However, we have a number of options, including the RFI, which will assist Jamaica to endure this period, and emerge stronger, while preserving the macro-economic stability that all Jamaicans have worked and sacrificed to achieve.”