Eleven countries in Latin America and the Caribbean, a third of the total, have requested and received financial assistance from the International Monetary Fund (IMF) to face the crisis caused by the coronavirus pandemic, according to the latest data from the institution.
The figure could grow in the coming days, as the institution led by Kristalina Georgieva only publishes officially approved applications.
Countries have resorted to two instruments designed for emergencies, the Quick Credit Tool (RCF) and the Quick Financing Instrument (RFI), both do not require to be accompanied by an economic supervision program and are intended to offset an “urgent balance of payments need”.
For now, they have received the green light from the agency: Bolivia (RFI), with $ 327 million; Costa Rica (RFI), $ 508 million, Dominica (RCF), $ 14 million; Dominican Republic (RFI), 650 million; Ecuador (RFI), $ 643 million; El Salvador (RFI); 389 million; Granada (RCF), $ 22 million.
Likewise, Haiti (RCF), $ 112 million; Panama (RFI), 515 million; Paraguay (RFI), $ 274 million, and Santa Lucía (RCF), $ 29 million.
The RCF has a grace period of 5 and a half years and a repayment term of 10 years, without interest; while the RFI has to be paid in a period of between three and five years, at a low interest rate.
In total, the approved disbursements in the region amount to $ 3,483 million.
At the same time, Honduras, which already had an ongoing program with the Fund, has asked to strengthen support for the problems caused by COVID-19 with an additional $ 200 million.
On the other hand, Colombia has recently requested an expansion of its flexible line of credit to $ 10.8 billion.
Mexico, the second regional economy, has another similar line of credit, worth $ 61 billion.
Both countries can use these funds, which are in principle precautionary in nature, to face the financial tensions stemming from the pandemic.
“As the pandemic continues to spread throughout the region, countries face the worst economic recession since national accounts statistics began to be produced in the 1950s,” Alejandro Werner, director for the Fund’s Western Hemisphere, recently explained in a blog.
Werner pointed out that “the complex external environment, added to the much-needed measures to contain the pandemic, has caused a collapse in economic activity throughout Latin America, whose growth is heading towards a 5.2 percent contraction in 2020 “.
The Fund, globally, has so far approved more than $ 17.6 billion to more than fifty countries worldwide to ease the economic burden of the pandemic.