IMF Executive Board approves Stand-By Arrangement with St. Kitts and Nevis
BASSETERRE, ST. KITTS, JULY 28TH 2011 – The Executive Board of the International Monetary Fund (IMF) has approved a three-year Stand-By Arrangement (SBA) for an amount equivalent to SDR 52.51 million (about US$84.5 million) with St. Kitts and Nevis.
A statement issued in Washington DC said the arrangement will support the authorities’ economic program, coupled with a comprehensive debt restructuring, to restore debt and external sustainability and set the stage for sustained growth.
The statement said that as a result of the Board’s decision, an amount equivalent to SDR 22.15 million (about US$35.6 million) is available for immediate disbursement. The three-year SBA arrangement represents 590 percent of St. Kitts and Nevis’ (SDR 8.9 million) IMF quota. St. Kitts and Nevis joined the Fund in August 1984.
Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas unveiled a three-fold objective of a new home-grown economic strategy and programme following an announcement by the International Monetary Fund (IMF) of a US$84 million Stand-By Arrangement on Friday.
“Firstly, to create the environment for strong and sustainable growth to occur, secondly, to place debt on a downward trajectory in order to reach a sustainable level of debt and thirdly to maintain the health of the financial system at the same time while we are achieving the first two,” said Prime Minister Douglas in an opening statement at a Joint Press Conference by the St. Kitts and Nevis Ministry of Finance and a visiting IMF Mission Team in June this year.
Dr. Douglas told reporters that the global economic and financial crises have brought home very forcefully to the vulnerability of St Kitts and Nevis to external shocks.
“Due mainly to a decrease in tourism receipts and foreign direct investment by roughly 25% each in 2009, GDP is now estimated to have contracted by over 9% in 2009 and by a further 1.5% in 2010. In 2011 and 2012 the economy is forecast to grow by approximately 1.5% per annum,” said Prime Minister Douglas, pointing out that the global recession has severely impacted economic activity in the wider Eastern Caribbean Currency Union (ECCU) region.