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Waterkent in the capital of a Paramaribo, Suriname (Photo: Black Past)

IMF reaches 3-year agreement with Gov’t of Suriname

Waterkent in the capital of a Paramaribo, Suriname (Photo: Black Past)

The International Monetary Fund (IMF) has reached an agreement with the Government of Suriname to provide financial support over the next three years through an Extended Facility Fund worth US$690 million.

In a release, the IMF said it finalised the agreement after a staff mission, led by Ali Alichi, held virtual meetings over the past several months to discuss how the institution could support Suriname’s economic reform programme.

The International Monetary Fund building in Washington, DC, USA (File photo)

“I am pleased to announce that the IMF staff completed policy discussions with the authorities and reached an agreement on a new medium-term program that could be supported by IMF resources of SDR 472.8 million (about US$ 690 million) under the Extended Fund Facility (EFF) with the duration of 36 months, over 2021-2024,” Alichi stated.

The head of mission noted, however, that the agreement is subject to the approval of the IMF’s executive board, which it will indicate its decision “in the coming weeks”. Moreover, the approval of the programme is contingent on the Surinamese authorities completing the implementation of a set of important policies and receipt of the necessary financing assurances.

If the IMF’s board approves the agreement, Suriname stands to receive a disbursement of approximately US$ 57.5 million, representing the first tranche.

The Central Bank of suriname (Photo: Twitter @Suriname Herald)

According to the IMF, “The programme aims to lay the foundation for a strong, resilient, and inclusive economic recovery through protecting the poor, lowering inflation, restoring debt sustainability, and investing in the future.”.

With the support of by the IMF Extended Fund Facility, the Government of Suriname plans to increase its provision of fiscal resources to the most vulnerable members of the society, substantially reducing the country’s fiscal deficit, adopt a sound monetary regime to reduce inflation, and rebuild the international reserves.

As part of a range of institutional reforms to strengthen policymaking and improve governance, the Government will shift to a flexible exchange rate.

“The Surinamese Government faced a difficult situation when it assumed office with high inflation, low international reserves, a large fiscal deficit, and significant fiscal and BOP financing needs. The already serious economic situation was further exacerbated by the challenges arising from the COVID-19 pandemic and volatility in the terms of trade,” the release from the IMF pointed out.

Read the following release for further details: https://caribbeanbusinessreport.com/specialreports/imf-reaches-agreement-with-suriname-on-a-us690-m-3-year-programme-under-the-extended-fund-facility/