KINGSTON, Jamaica, Observer – IN a press briefing yesterday, Governor Brian Wynter expanded on Bank of Jamaica (BOJ) statement released that morning on the foreign exchange market. In the BOJ's press statement, they had noted that the fall in the exchange rate “had occurred in the context of extended negotiations with the International Monetary Fund (IMF) for a new borrowing programme, and some uncertainty regarding the extent of the financial support”. It stated “That uncertainty is now in retreat,” as the IMF has announced that it will take a new, bigger programme of US$958 million to their Executive Board, over US$200 million more than initially announced (what the Governor called “good news for us”), and the World Bank and IDB have announced an additional US$510 million each over four years, for a total package of just under US$2 billion.
Critically, the Governor observed, the recent announcements show the programme has multilateral support. Jamaica had completed all prior actions, on time, that would have allowed the programme to go to the board at the end of March. The outstanding issue for the IMF, accounting for the further delay, was “financial assurances”. By this, the IMF meant it needed sufficient support for the programme from the other two funders, the IDB and World Bank, involving their relative share and timing of the overall package, which has now been received. As an IMF executive noted in Monday's IMF briefing “maybe we were a little optimistic as to how long the discussions would take, given how complicated a case Jamaica is”.
The total IMF programme has been increased, from the original 175 per cent of Jamaica's quota, to 225 per cent of quota, with the first tranche of US$213 million, or 50 per cent of quota, to be disbursed almost immediately on the board's approval of the programme, expected by the end of April. Although the initial tranche hadn't changed, the rest of the new money, according to Monday's IMF briefing, had now been “front loaded”. Conversations with international players suggest that the new IMF programme will now be cash flow positive for Jamaica throughout its life, rather than being negative, suggesting a much higher level of IMF commitment, clearly a very welcome development.
