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 Published Thursday, June 25, 2020 International
Bank offers
$250 million loan to Costa Rica By the A.M. Costa Rica staff and wire services Costa
Rica will receive a $250 million loan to finance
its efforts to contain the covid-19 sanitary
crisis and mitigate its impacts on the economy, as
well as reduce the fiscal deficit, announced the
Inter-American Development Bank, IDB, on
Wednesday.
According to the Washington-based bank, the budget-support, fast disbursement loan is in line with a Rapid Financial Assistance, RFI, arrangement approved in April by the International Monetary Fund to help tackle the covid-19 emergency and its effects on the country’s economy. "The funds will help the government to continue implementing a countercyclical fiscal policy during the crisis and preserve Costa Rica’s macroeconomic stability, thus contributing to alleviating the pandemic’s impact on business and vulnerable households," said the bank in its statement. The program will also support the government’s efforts to reduce the fiscal deficit and ensure public-debt sustainability, promote economic recovery, safeguard the stability of the financial system and the balance of payments, and help promote competitiveness and improve the business environment, the International organization said. The IDB loan agreement includes providing the funds in a single transaction, a seven-year amortization period, a three-year grace period and an interest rate based on Libor. In May, Congress approved a $379 million loan agreement between the government with two international banks, the IDB and the French Development Agency, or AFD for its French initials. According to Congress, the loan with AFD was originally asked to finance Costa Rica's decarbonization plan, but will now be used to support the crisis due to the pandemic. The IDB offered $230 million and about $149.5 million was offered by the AFD, the government said. The loan terms are a repayment time of 20 years and a grace period of 5.5 years. The IDB interest rate is 3-month Libor plus 0.92%, and the AFD interest rate is 6-month Euribor plus a 1.3% margin. The IDB was established in 1959, to provide long-term financing funds in Latin America and the Caribbean. -------------------------- Should the government continue to get more loans with international banks? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com |
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