IMF Executive Board Completes Second Reviews Under SBA and SCF Arrangement and Approves Augmentations of Access to Support Honduras’ COVID-19 Measures
June 1, 2020
- The decisions increase total Fund support to about US$531 million. This immediately releases US$233 million, more than a fivefold increase in the amount originally approved by the Executive Board.
- The COVID-19 pandemic and external spillovers are expected to hit Honduras hard, and the augmentation of access will support the authorities’ response to mitigate the impact.
- The completion of the reviews will help Honduras meet urgent balance of payments needs stemming from the pandemic, including increased health care and social spending.
– The Executive Board of the International
Monetary Fund (IMF) completed today the second reviews of Honduras’
performance under its economic program supported by a two-year Stand-By
Arrangement (SBA) and a two-year arrangement under the Standby Credit
Facility (SCF). This program was approved on July 15th, 2019 in the amount
of about US$308 million (SDR 224.82 million), the equivalent of 90 percent
of Honduras’ quota in the IMF (see
Press Release 19/284
). Today, the Executive Board also approved augmentations of access under
both arrangements by about US$223 million (SDR 162.37 million), bringing
combined total access under the SBA and SCF arrangement to about US$531
million (SDR 387.19 million, 155 percent of quota).
The completion of the reviews will release about US$233 million (SDR
169.864 million), to help Honduras meet urgent balance of payments and fiscal financing
needs stemming from the COVID-19 pandemic, including increased health care and social spending. In late March, to
support the policy response to the crisis, the authorities decided to draw
on available Fund resources for US$143 million (SDR 104.92 million).
Previously, the authorities had treated the arrangements as precautionary.
Following the Executive Board’s discussion on Honduras, Mr. Mitsuhiro
Furusawa, Deputy Managing Director and Acting Chair, made the following
“The COVID-19 pandemic and external spillovers are having a significant
impact on Honduras, but the authorities remain strongly committed to the
Fund-supported economic program. Despite a challenging economic environment
in 2019, they have strived to maintain macroeconomic stability and protect
social spending and investment. Electricity sector reforms are making
progress and steps are being taken to improve governance.
“The authorities are articulating a strong policy response, including by using the flexibility under the Fiscal Responsibility Law to
temporarily increase the deficit and accommodate higher healthcare and
social spending. Measures are temporary and targeted to support affected
groups and mitigate structural vulnerabilities. Monetary policy remains
geared towards maintaining price stability and adequate international
reserves, and efforts to strengthen the monetary policy framework and
support the transition to a more flexible exchange rate continue. The
authorities will strengthen tax administration to preserve tax revenue and
protect critical spending. They will resume revenue mobilization efforts
once the impact of the pandemic subsides.
“The authorities continue to take steps to improve the institutional
framework in the electricity sector. Important measures have been
incorporated into the program. These aim at improving governance and
facilitating the unbundling of the national electricity company (ENEE).
Tariffs continue to reflect the cost of electricity provision while
providing subsidies to the poor.
“To improve governance, efforts are ongoing to strengthen public
procurement and the institutional framework in the central bank and the
Treasury. Reforms also aim at enhancing the Public Private Partnership,
AML/CFT, and anti-corruption frameworks; and at securing transparency and
accountability—including on pandemic-related emergency spending.
“The augmentation of access under the Stand-By Arrangement and the
Arrangement under the Standby Credit Facility should help the authorities
cover external financing needs to mitigate the impact of the pandemic.”
IMF Communications Department
PRESS OFFICER: Maria Candia Romano
Phone: +1 202 623-7100Email: MEDIA@IMF.org