NASSAU, BAHAMAS — The Executive Board of the International Monetary Fund (IMF) has approved a disbursement of US$250 million to the country under the Rapid Financing Instrument (RFI).
The government applied to take advantage of the low-cost emergency loan facility that is available to all member countries in a bid to meet the urgent balance-of-payments needs stemming from the COVID-19 pandemic..
Tao Zhang, Deputy Managing Director and Acting Chair, said: “The Bahamas was just recovering from the widespread destruction caused by Hurricane Dorian in the fall of 2019, when the pandemic led to a sudden stop in tourism, generating sizable fiscal and external financing needs. The economic outlook remains subject to an unusually high degree of uncertainty.
“The authorities’ policy response to the COVID-19 crisis is appropriate, including the timely adoption of targeted fiscal measures to boost health spending, support jobs and vulnerable segments of the population. Once the present crisis subsides, significant and determined fiscal consolidation will be needed to achieve the targets specified under the Fiscal Responsibility Act.”
Zhang said: “The Central Bank of The Bahamas’ focus on maintaining an adequate level of international reserves is welcome. While efforts to maintain the flow of credit in the economy are warranted, the temporary relaxation of prudential regulations should continue to be accompanied by close monitoring of NPL classification and prudent risk management practices.”
“The disbursement under the RFI will help boost resources for essential COVID-19related outlays, strengthen reserves and catalyze additional support from other international financial institutions, development partners, and the private sector.
He added: “Looking beyond the crisis, it would be important for the authorities to resume their ambitious reform agenda including enhancing public financial management and SOE governance, advancing revenue administration reforms and continuing to improve the effectiveness of the AML/CFT framework. Strengthening resilience to natural disasters also remains a priority.”