The Dutch dependent Caribbean island of Suriname has reached a US$690 million financing deal with the International Monetary Fund (IMF), which is a key step in the small South American nation’s effort to restructure its debts.

The IMF is reporting that it has reached a staff-level agreement with Suriname, in which it would be providing US$690 million in financing to help Suriname restructure its debts. Suriname’s creditors last month agreed to defer payments of principal and interest on its 2023 and 2026 bonds.

This was part of the country’s effort to stabilize government finances amid high inflation and the economic fallout of the coronavirus pandemic. “It’s great news for Suriname,” President Chan Santokhi said in an interview with Suriname’s Radio ABC on Thursday.

President Santokhi told public radio that, “(It was) a very intensive meeting as a last step, last step, to reach an agreement between Suriname and the IMF.”

IMF slated to approve 3-year EFF for Suriname

The IMF is slated to approve a three-year Extended Fund Facility (EFF) programme for the Dutch dependency. According to the IMF, the EFF could be approved by its executive board in the coming weeks.

In a statement released last week, the IMF said, “debt relief from Suriname’s official bilateral partners and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps.” The IMF statement highlighted that financing Suriname’s debt gap will need to be complemented by progress toward a restructuring of commercial debts.

If approved by the IMF Executive Board, US$57.5 million would be immediately available to Suriname from the multilateral funding institution.