IMF official tells PM Douglas Executive Board ‘very positive and supportive of review’

George Tsibouris, the IMF Caribbean Division I Western Hemisphere Department

BASSETERRE, ST. KITTS, AUGUST 15TH2012 (CUOPM) – St. Kitts and Nevis’ Prime Minister the Rt. Hon. Dr. Denzil L. Douglas has been informed that the Washington-based International National Monetary Fund (IMF) was positive and supportive of the Third Stand By Arrangement Review.

“I am pleased to inform you that the IMF Executive Board met this afternoon and approved the completion of the 3rd SBA review. The Executive Board was very positive and supportive. My congratulations on the successful completion of this review,” GeorgeTsibouris, the IMF Caribbean Division I Western Hemisphere Department.

Mr. Tsibouris informed Prime Minister Douglas, who is also Minister of Finance, that the IMF Executive Director, Mr. Hockin, will be providing a detailed account of how the Board discussion went.

“We stand ready to continue the close dialogue in the period ahead and look forward to the discussions (in late September) on the 4th review of the SBA,” Mr. Tsibouris told Prime Minister Douglas.

In July, the Washington-based International Monetary Fund (IMF) informed that its Executive Board had completed the second review of St. Kitts and Nevis’ economic performance under a programme supported by a 36-month Stand-by Arrangement (SBA) that allowed the immediate disbursement of an amount equivalent to SDR 3.161 million (about US$4.83 million), bringing total disbursements under the arrangement to SDR 36.781 million (about US$56.21million).

The SBA was approved on July 27, 2011 for an amount equivalent to SDR 52.51 million (about US$80.25 million), or 590 percent of St. Kitts and Nevis’ IMF quota.

Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair of the Washington-based financial institution also commended the Federal Government of St. Kitts and Nevis for meeting the fiscal target in the face of global economic and financial challenges.

“The authorities are to be commended for the strong implementation of their home-grown, Fund-supported programme. Notwithstanding an adverse global setting, the fiscal target was met by a comfortable margin, and the authorities’ structural reforms progressed as planned,” said Mr. Shinohara

He noted that following three consecutive years of decline, the domestic economic outlook for St. Kitts and Nevis is “positive, supported by FDI-related construction and an improvement in tourism activities, although the global environment continues to present downside risks.”

“The authorities successfully concluded a debt exchange with bondholders and external commercial creditors, the first phase of the comprehensive restructuring of the public debt. They have also made further progress in the resolution of domestic loans, including on the conversion of loans secured with land. It will be important to minimize the impact of debt restructuring on banks’ balance sheets to preserve financial sector stability. The Special Purpose Vehicle should be implemented according to international best practices,” said the statement.