Honduras Reaches Stand-by Agreement with IMF

The agreement, which expires in March 2012, will enable the country to get immediate access to funds worth $196 million.

Monday, September 13, 2010

An International Monetary Fund (IMF) staff mission was in Tegucigalpa between 7 and 10 September to continue discussions on an agreement between Honduras and the IMF to support the government's economic program. At the close, the mission's chief, Mr. Przemek Gajdeczka, issued the following statement:

“I am pleased to inform that the mission has reached an agreement in principle with the Honduran authorities on an economic program through March 2012, to be supported by a US$196 million Stand-By Arrangement and Stand-by Credit Facility. The agreement reached with the authorities is subject to approval from the IMF’s management and Executive Board, who will consider the request for the agreement in early October.

“The program is geared at re-establishing macroeconomic stability, strengthening public finances, restoring investor confidence, and supporting economic recovery. The program will be anchored on the authorities’ efforts to establish control over the public finances, maintain prudent monetary policy, and undertake structural reforms to improve the efficiency of the public sector.

“On the public finances, the program aims at reducing fiscal imbalances while improving the composition of public spending, to give space for high priority investment and poverty-reducing outlays. To achieve these objectives, the authorities are committed to improve tax administration and collection; control current spending, including the wage bill; improve the targeting of social spending to the poor; and improve the financial position of key public enterprises and pension funds. In addition, the program aims at keeping inflation restrained, strengthen the international reserves position, and safeguard competitiveness. The program also seeks to improve banking supervision and strengthen buffers in the financial system. These policy actions will facilitate the restoration of macroeconomic stability and lay the foundations for sustained economic growth.”

More on this topic

Salvadoran Authorities and IMF Mission Reach Agreement

February 2011

IMF Mission and Salvadoran Authorities Reach Agreement on an Economic Program for 2011 in the Context of the Stand-By Arrangement

Press Release No. 11/41
February 11, 2011
Mario Garza, mission chief of the International Monetary Fund (IMF) to El Salvador, issued the following statement today in San Salvador:

IMF Concludes Review of Honduras

December 2010

"The performance of public finances until September was in line with the program negotiated with the government," concluded the IMF mission.

An IMF team held meetings with the economic cabinet, other policymakers and private sector representatives from November 29 until December 3.

El Salvador and the IMF

May 2009

"El Salvador’s financial system has weathered well the aftershocks of the global financial crisis and the uncertainties surrounding the elections, and remains liquid and well-capitalized."

A mission from the International Monetary Fund (IMF), headed by Alfred Schipke, visited San Salvador during May 18-27 to initiate discussions for the first review under the US$800 million precautionary Stand-By Arrangement, approved on January 16, 2009 (see Press Release No. 09/10). The mission had joint discussions with senior government officials and members of the incoming administration’s economic team, and also met with private sector representatives. At the conclusion of the mission, Mr. Schipke made the following statement:

Statement on IMF Staff Visit to Honduras

May 2008

The IMF mission that visited Honduras during May 13-21, 2008 discussed policy responses to the weakening external conditions.

The mission agreed that full implementation of the policies set out in the authorities' program would be key to help the economy adjust smoothly to the emerging risks from the external shock, especially on fuel prices.

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