Davies says financing programme working
Davies
THE GOVERNMENT has already received US$75 million (J$3.3 billion) of the US$325 million (J$14.6 billion) in loans due from the multilateral trio of the World Bank, the Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB) over the next two years, to resolve the problems in the financial sector.
An upbeat Minister of Finance and Planning, Dr. Omar Davies, in a statement to the House of Representatives yesterday, said his success with the loans indicated the programme of financing for the financial sector, articulated in his April Budget speech, was firmly on track.
He said with the receipt of the US$75 million from the IDB, as well as a further US$12.5 million (J$562 million) from the CDB, expected by next week, and the "imminent approval" of the World Bank's loan this week and the subsequent receipt of the first tranche of that loan another US$75 million, the country's NIR (Net International Reserves) and the Central Bank's ability to manage the foreign exchange market would be further strengthened.
The IDB loan was approved in mid-September. With the fulfilment of all conditions, the first tranche was disbursed by the IDB and was received into the Government's account.
The World Bank loan will be taken to its Board on Thursday.
Dr. Davies said there was "full expectation" it would be approved and he has been invited by the bank to be in Washington next week to sign the agreement.
The Minister reminded the House that a critical component of the programme to bring about a resolution of problems in the financial sector, which he outlined in the Budget, was for Jamaica to access concessionary loan financing from multilateral institutions.
These resources would be used to retire some of the FINSAC Bonds, which have been used to address the solvency problems of the institutions, particularly the Union Bank and the National Commercial Bank (NCB).
He had also indicated the major multilateral banks, the World Bank and the IDB, had requested this be done within the context of the Staff Monitored Programme (SMP) of the International Monetary Fund (IMF). The SMP was approved by the IMF staff earlier this year, paving the way for the submission of loan applications to the multilateral bankers, he said.
