The Bahamas will receive US$250 million in emergency funding from the International Monetary Fund (IMF) to assist with its worsened financial needs amid the coronavirus (COVID-19) pandemic.
Approval for the funding was made known yesterday, June 1, following approval by the international body’s Executive Board.
The money will go towards balance-of-payment needs for the nation, which was still reeling from the impact of Hurricane Dorian last September.
The funds will be made available to The Bahamas under the Rapid Financing Instrument (RFI) and will see the country reap 100 per cent of its quota available to strengthen its COVID response and supplement aid provided by other partners, the IMF said.
The virus, which has infected 6.3 million people worldwide, has been particularly disruptive to The Bahamas which was only beginning to recover from the effects of Dorian. The restrictions imposed to contain the virus, including a ban on arrivals at its sea and air ports, led to a halt in its tourism that will push it towards a deep recession, the global body said.
Further, the IMF said “The Bahamas faces an unprecedented crisis as it battles the fallout from two consecutive large shocks. It was just recovering from the widespread destruction caused by Hurricane Dorian in the fall of 2019, when the COVID-19 pandemic led to a sudden stop in tourism, causing a deep recession and creating large external and fiscal financing needs.”
Deputy Managing Director and Acting Chair, Tao Zhang, added “The authorities’ policy response to the COVID-19 crisis is appropriate, including the timely adoption of targeted fiscal measures to boost health spending, support jobs and vulnerable segments of the population. Once the present crisis subsides, significant and determined fiscal consolidation will be needed to achieve the targets specified under the Fiscal Responsibility Act.
“The Central Bank of The Bahamas’ focus on maintaining an adequate level of international reserves is welcome. While efforts to maintain the flow of credit in the economy are warranted, the temporary relaxation of prudential regulations should continue to be accompanied by close monitoring of NPL classification and prudent risk management practices.
“The disbursement under the RFI will help boost resources for essential COVID-19 related outlays, strengthen reserves and catalyse additional support from other international financial institutions, development partners, and the private sector,” he said.