IMF Executive Board Approves US$41.6 Million Disbursement under the Rapid Credit Facility for Haiti

IMF News, November 18, 2016

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Canonical URL: IMF Executive Board Approves US$41.6 Million Disbursement under the Rapid Credit Facility for Haiti

The Executive Board approved SDR 30.7125 million (about US$41.6 million) in financial assistance for the Republic of Haiti under the Rapid Credit Facility (RCF).
The assistance is to help the authorities meet urgent balance of payments needs arising from the effects of Hurricane Matthew.
The funds will be made available immediately.

The hurricane was a strong category 4 storm that hit the country in early October.
Casualties and displacement:
- killed more than 500 people
- displaced more than 175,000 into temporary shelters
- put over 1.4 million in immediate need of humanitarian assistance
Geographic impact: widespread destruction of buildings and infrastructure in the southwestern départements of Grand Anse, Sud and Nippes.
Preliminary estimates of damage and loss: US$1.9 billion, about 23 percent of Haiti’s GDP.

The RCF provides immediate financial assistance with limited conditionality to low-income countries with an urgent balance of payments need.
Financing under the RCF:
- carries a zero interest rate
- has a grace period of 5.5 years
- has a final maturity of 10 years
The economic policies of a member receiving RCF financing are expected to address the underlying balance of payments difficulties and support policy objectives including macroeconomic stability and poverty reduction.
The Fund reviews the level of interest rates for all concessional facilities every two years.

Emergency relief and reconstruction costs will significantly raise the overall fiscal deficit.
The increase in imports of goods and services will widen the external current account deficit over the next few years.
Authorities’ fiscal commitments:
- limit the non-hurricane budget deficit to approximately 2.3 percent of GDP in fiscal year 2016/17
- sustain prudent financing of the deficit
- not enter into any non-concessional loan contracts during fiscal year 2016/17
- avoid the accumulation of public sector arrears
Monetary and external sector commitments:
- gross reserves are anticipated to remain adequate
- the central bank will maintain exchange rate flexibility

IMF financing through the RCF will help meet urgent foreign exchange needs and ease pressure on the balance of payments.
The IMF will:
- continue to play a key role in coordinating and catalyzing international support for Haiti’s reconstruction and development efforts
- mobilize the assistance of the donor community, which will be crucial to achieving disaster recovery and longer-term development objectives
- consult with the authorities in laying out a medium-term economic plan and ensuring sustainability of the balance of payments
The authorities are committed to revising their strategy for growth and social protection so rebuilding and recovery efforts support long-term goals of poverty reduction and stronger growth.

IMF Communications Department, MEDIA RELATIONS, PRESS OFFICER:
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org

Source: IMF Press Release No. 16/517, November 18, 2016.