Monday 6 February 2023

IMF disbursed US$521.7 million to Costa Rica

Resources correspond to the quick credit approved by the Legislative Assembly, on August 27

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4 February 2023 - At The Banks - BCCR

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(QCOSTARICA) The International Monetary Fund (IMF) disbursed us$521.7 million Costa Rica, this September 15, of the fast loan approved by the Legislative Assembly on August 27.

Ministerio de Hacienda (Ministry of Finance) central offices in downtown San Jose

The Government will use 90% of these resources to exchange external debt for internal debt, and the remaining 10% will be transferred to the Caja Costarricense de Seguro Social (CCSS) as payment of the debt that the Central Government has with the institution.

The credit was requested from the IMF by the Government in March, at the beginning of the pandemic, to cover an “urgent need for a balance of payments”. The IMF approved it in April through a Rapid Financing Instrument (IFR) on soft terms, at an annual interest of 1.55%, on a five year note, with quarterly payments starting at 39 months after the disbursement has been made.

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The Ministry of Finance estimates that the country would save US$100 million in interest with this loan, compared to obtaining the resources in the local market at a rate of 7.5% per year.

Now, the Government is preparing to begin negotiations with the IMF for a new loan, for US$2.25 billion dollars, but for the medium term and that requires structural reforms on the part of the government, which includes new taxes. The details of the IMF loan are expected Thursday, September 17.

As explained by the Minister of Finance, Elian Villegas, either on September 28 or October 5, they would begin talks with the IMF for the new loan.

 

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