IMF provides funds to Grenada

The International Monetary Fund (IMF) Tuesday announced that it is providing US$6.2 million in immediate disbursement to Grenada less than a week after it completed a review of the island’s economic performance under the Poverty Reduction and Growth Facility (PRGF) arrangement, according to a report on www.cananews.net.



An IMF statement said the completion of the review on November 25 allows for the immediate disbursement of the funds, bringing total disbursements to an estimated US$23.5 million.



IMF said it had also approved the request to modify a quantitative performance criterion by relaxing the target for end of November domestic arrears older than 60 days because of delays in external disbursements, a waiver on the performance criterion on the primary balance excluding grants at the end of December 2008.



The three-year PRGF with Grenada was approved in 2006 and in 2008 was augmented to US$19.2 million to help mitigate the impact of food and fuel price shocks and extended by one year to April 16, 2010.



IMF Deputy Managing Director Takatoshi Kato said the impact of the global crisis on Grenada’s economy has been more pronounced than initially envisaged.



He said the government is committed to moving forward expeditiously with the drafting of a Poverty Reduction Strategy Paper.



Kato stated the banking sector has remained resilient, and important progress has been made in strengthening the capacity for nonbank financial supervision and regulation.



He said the authorities have co-operated closely with regional governments to contain the fallout from the financial difficulties associated with the Trinidad and Tobago-based CL Financial Group.



But he warned that Grenada remains at high risk of debt distress.