Suriname will receive US$53 million from the International Monetary Fund (IMF) after the executive board of the Washington-based financial institution Friday completed the fourth review under the Extended Fund Facility (EFF) arrangement for Suriname.
It said that the completion of the review allows the authorities in the Dutch-speaking Caribbean Community (CARICOM) country to draw the equivalent of SDR 39.4 million bringing total purchase under the EFF arrangement to SDR 197 million or an estimated US$263 million.
In completing the review, the IMF executive board also approved Suriname’s request for an augmentation of access equivalent to SDR 46.8 million or US$ 63 million and an extension of the EFF arrangement to end-March 2025.
“With this augmentation, the total access expected under the EFF arrangement is SDR 430.7 million or about US$ 577 million,” the IMF said.
It said Suriname is implementing an ambitious economic reform agenda aimed at restoring fiscal and debt sustainability through fiscal consolidation and debt restructuring, protecting the vulnerable by expanding social protection, upgrading the monetary and exchange rate policy framework, addressing the financial sector’s vulnerabilities, and advancing the anti-corruption and governance agenda.
These policies are supported by the EFF arrangement, which was approved by the executive board on December 22, 2021.
IMF deputy managing director, Kenji Okamura, said Suriname authorities’ have shown continued commitment to fiscal discipline and macroeconomic stabilization under the EFF-supported program.
He said the economy is stabilising, pressures on the exchange rate have eased, and inflation is on a downward trend.
“The authorities’ implementation of difficult reforms in a challenging political and socio-economic environment is commendable. These included reforms such as complete elimination of fuel subsidies, gradual phasing out of electricity subsidies, curtailing wage payments to unregistered public servants, and broadening the value-added tax (VAT) base.
“A more gradual path of fiscal consolidation than planned at the previous review will help protect the still fragile recovery, increase support for the poor and vulnerable, prevent further erosion in real wages for registered civil servants, and scale up growth-enhancing investment.”
Okamura said an extension of the arrangement to end-March 2025 and an augmentation of access will help address balance of payment needs and help ensure that the 2025 budget is consistent with the 3.5 per cent of the gross domestic product (GDP) primary balance target.
- “Excellent progress has been made with debt restructuring. The debt exchange with private bondholders has been finalized with high participation rate. An agreement in principle at the technical level has been reached with Exim China and is under internal approval process for signature,” said Okamura.
He said the monetary policy stance has been appropriately tight, helping ease inflationary pressures and that the authorities have demonstrated a commitment to a flexible, market-determined exchange rate is helping support accumulation of international reserves.
He said swift implementation of the new Central Bank Act and finalization of its recapitalisation plan will help further strengthen its operational independence and financial autonomy.
“Steadfast progress is also necessary to address continued banking system vulnerabilities, including through stronger oversight of the banking system and promptly finalizing the assessment of the government-owned bank’s recapitalisation plan.
“Structural reforms to strengthen institutions, governance, and data quality remain key priorities with continued capacity building support by the Fund and other development partners,” Okamura said, adding that Suriname should continue pursuing measures to strengthen their anti-corruption and anti-money laundering and counter-terrorism financing (AML/CFT) frameworks and ensure their alignment with international standards.