Finance
BRB | Sep 12, 2022

Barbados seeking new loan agreement with IMF

/ Our Today

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IMF Chief of Mission for Barbados, Bert van Selm; Prime Minister Mia Mottley and Finance Minister Ryan Straughn in a May 2019 meeting. (Photo: Twitter @BvanSelm)

Prime Minister Mia Mottley has confirmed that Barbados is returning to the International Monetary Fund (IMF) for a new loan agreement.                   

Mottley, who made the announcement over the weekend, said this new loan agreement is being sought this month, as the 2018 Extended Fund Facility (EFF) for Barbados has ended. That EFF was for US$290 million and aimed at helping the island restore debt sustainability, strengthen the external position, and improve growth prospects.

Mottley, speaking at a news conference locally, disclosed that Barbados intends to start a BERT (Barbados Economic Recovery and Transformation) programme with the IMF this year.

The Barbadian leader defended the decision to seek assistance from the IMF, saying the country could have easily gone to the international market to raise the required funds.

According to her, “This decision has not been taken lightly, but this is being done to ensure Barbados can continue its trajectory of positive growth. In addition to providing further means to stabilise our country, this programme will unlock critically important funding, giving Barbados a boot on the great progress we have already made, despite the hardships brought on by the global challenges.”

“These are indeed rough waters, but this is not a race for the swift and I know we can and will endure and at the same time create a better society for every Bajan to live in,” added Mottley.

Bajan authorities have been emphasising that BERT was not a rigid set of targets, but a plan of action and behaviour that was measured and monitored.

Prime Minister Mottley argued, “I don’t want to go to the market when interest rates are being increased. We can go to the IMF and pay a fraction of what the market will ask us to pay.”

She was adamant that the time is not right for Barbados to go to the international capital market to source funds, opting for the route of the IMF.

The International Monetary Fund logo is seen inside its headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016. (Photo: REUTERS/Yuri Gripas/File)

Mottley disclosed that she will be flying to Paris today (September 12) before travelling to Washington. She will hold discussions in the French capital with the representatives of the Organization for Economic Co-operation and Development (OECD) on taxation issues.

On Wednesday, the prime minister will be in Washington, where she will be giving evidence before the United States House of Representatives Committee on Financial Services at a hearing titled, ‘When Banks leave: The impacts of De-Risking on the Caribbean and Strategies for Ensuring Financial Access‘.

On Thursday, she will meet with US Vice-President Kamala Harris.             

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