The Board of the International Monetary Fund (IMF), based in Washington, D.C. (United States), approved on April 29 the request of Costa Rica to obtain a quick disbursement credit to attend the emergency caused by the covid-19 pandemic.
The approved credit is for USD 508 million, under the Rapid Financing Instrument.
The request was analyzed on the 16th and 17th of this month by the IMF technical team and the representation of Costa Rica, led by the President of the Central Bank of Costa Rica (BCCR), Rodrigo Cubero, and the finance ministers, Rodrigo Chaves, and National Planning and Economic Policy (Mideplan), Pilar Garrido. The IMF team was led by Inci Otker, Chief of the Central American Division of the Western Hemisphere Department.
Now that the IMF Board has approved it, the loan project will go to Mideplan and the BCCR for analysis and institutional criteria, and once that process has been completed, it will be sent to the Legislative Assembly for consideration.
The disbursement would be in a single tract and the resources would go to the Central Government. The credit to the country has an interest rate of 150 basis points over the interest rate of the Special Drawing Rights (SDR) of the IMF (which is currently 5 basis points), for a current total rate of 1 , 55% annually. The term of the loan is five years, with quarterly payments from 3¼ years of disbursement.
“This fast-disbursing loan that was just approved by the IMF’s Board of Directors is of fundamental importance to the country. In the first place, the resources will allow the Government to finance the attention to the health and economic crisis under very favorable rate and term conditions. On the other hand, the approval by the Board of the IMF implies an endorsement of our macroeconomic and financial policy framework, ”explained the President of the Central Bank, Rodrigo Cubero.
María del Pilar Garrido Gonzalo, Minister of National Planning and Economic Policy and coordinator of the Government’s Economic Council, expressed: “This instrument allows to give relief to the financing needs that the Government of the Republic requires to attend the emergency from its different dimensions , in the response phase we are in. With these resources we will ensure the attention of the most vulnerable sectors and the continuity of the provision of goods and services of the State. In addition, we will have more freedom to plan the recovery phase, in which we are working. ”
For his part, Finance Minister Rodrigo Chaves said: “I am pleased that the international financial community has shown confidence in the fiscal policy framework adopted by the country to address the economic crisis we are experiencing due to the pandemic. This confidence was reflected in the IMF’s positive decision, where 189 countries with voice and vote are represented. Furthermore, this amount is part of the set of resources that the Ministry of Finance has obtained to finance emergency care and fulfillment of the Government’s obligations. ”