Central Bank Governor says no need for IMF

Central Bank Governor Marion Williams says she does not anticipate the Barbados government approaching the International Monetary Fund (IMF) anytime soon for assistance in propping up the local economy, according to a report on cananews.net.



Several Caribbean countries including St. Lucia, St. Vincent and the Grenadines, Dominica and St. Kitts and Nevis have so far this year accessed IMF funds under the rapid-access component of the Exogenous Shocks Facility (ESF).



Jamaica is now seeking a US$1.2 billion Stand-by Agreement with the IMF.



Williams, being questioned by journalists following her review of the country’s economic performance for the first half of the year and presenting her outlook for the remainder of 2009, painted a picture that Barbados was a long way off from being in a position to turn to the Washington-based financial institution.



However she acknowledged that no economic recovery was expected this year and that unemployment is expected to rise.



“If our reserves increase by the end of the year, I would say that would suggest we don’t need that (IMF) and if they don’t, we still don’t need it,” she said.



“That is my view now, but I will not be sitting in this chair to make the decision but I don’t think that it would be necessary,” added Williams, who will be demitting office later this year.



Barbados’ net international reserves (NIR) stands at BDS$1.3 billion (US$650 million), although there was a marked reduction in net inflows on the capital and financial account, resulting in a BD$94.8 million (US$47.4 million) decline in the NIR of the monetary authorities.



“Despite the fall in reserves, the commercial banking system was still relatively liquid, as credit and deposit levels remained stable. In this regard, the Central Bank focused on offering liquidity support and encouraging a low interest rate environment,” she said.



In the meantime, Williams cautioned Barbadians about panicking over the economic situation.



“There is the confidence element which can change things quickly but if we believe, as I think we should, in the ability of Barbados to ride this out, we do not as a nation try to take unnecessary pre-emptive action which I think is unnecessary, then as a country we should be able to ride this out with appropriate measures for assistance to those who are seriously affected,” she said.