IMF loan for Jamaica raised to $958m

The International Monetary Fund said Monday that Jamaica could receive a $958 million restructuring loan, some $200 million more than originally planned, after a successful domestic debt swap. The four-year loan program, which must be approved by the IMF Executive Board, is aimed at helping the impoverished Caribbean country strengthen its economic and financial management. It will be part of a larger financing package that will also include funds from the World Bank and the Inter-American Development Bank. Preliminary approval came after Kingston carried out the country's second domestic debt restructuring in three years. The bond swap, completed on February 28, was aimed at replacing high-cost debt with bonds issued at lower rates, in order to reduce the government's debt service burden. It effectively cost the interest cost, but not principal, on nearly half of the country's 860 billion Jamaican dollars ($9.0 billion) in domestic debt. Once approved, the $958 million IMF loan program "crucially depends on full and timely policy implementation by Jamaica of a coordinated set of reforms, to strengthen the public finances, restore debt sustainability, enhance growth, and bolster the resilience of the financial sector," the Fund said in a statement. "Recognizing the sacrifice involved for the Jamaican people, the strategy also aims to minimize the impact on the poorest and most vulnerable." The IMF board is expected to rule on the loan by the end of April.