IMF delays hurting us - Phillips hopes to strike deal soon amid concerns in market - Lead Stories - Jamaica Gleaner - Thursday | March 28, 2013

IMF delays hurting us - Phillips hopes to strike deal soon amid concerns in market - Lead Stories - Jamaica Gleaner - Thursday | March 28, 2013:

ONE WEEK after Finance Minister Dr Peter Phillips disclosed that contingent talks between the International Monetary Fund (IMF), the Inter-American Development Bank and the World Bank were holding up the approval of an extended fund facility (EFF), he now says the country is being negatively impacted by the delay.

Phillips, who yesterday announced at a Jamaica House press briefing that Jamaica would not meet its deadline to secure an IMF agreement by month end, said the issues being discussed relate to funding support for Jamaica's programme.

"We are not direct participants in those discussions," Phillips said.

"On the basis of the information that we are able to glean, it is about the relative commitments of each to the overall programme and the timing of the commitment by each within the programme," Phillips said.

Last month, the IMF announced that its mission reached a staff-level agreement with the Jamaican authorities on the key elements of an economic programme that could be supported by a 48-month arrangement under the EFF in the amount of US$750 million.

At the time, the IMF said it envisages that its executive board would consider the proposed arrangement under the EFF by the end of March subject to the timely completion of prior actions to be taken by the Jamaican Government and obtaining necessary financing assurances.

HOPING FOR AGREEMENT SOON

Yesterday, Phillips said that while Jamaica is not involved in the discussions, he hoped the issues would soon be settled.

"You will note that in the first programme, there were some institutions that put more than some. That is a matter of concern - how much will each put and what is the timing," the minister noted.

"They have been meeting for three days straight and I believe they have become increasingly seized of the urgency and we have communicated over these three days directly that this is a matter of utmost urgency to us. I believe that that message is getting through," the minister said.

Central Bank Governor Brian Wynter, speaking at the same Jamaica House press briefing, said the resolution of the IMF issues is critical to halting the depreciation of the Jamaica dollar.

At the close of trading yesterday, the Jamaican dollar closed at $98.63 to US$1. Wynter said the degree of unsatisfied demand and concern about buyers and sellers in the foreign-exchange market is real.

According to Wynter, the fundamentals in the market are in balance. "We are not facing a worsening current account situation.

"It leads to the issue that it is really confidence that goes back to the issue of the IMF and timing that are driving these concerns in the market," Wynter said.

"I think the issue that would most help us at the moment is to resolve the question of the IMF board consideration, which will substantially reduce the sense of concern with this market and as this happens, we will see that the underlined environment will show its face much more clearly," Wynter said.

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