IMF approves new Jordan deal

An Extended Fund Facility agreement provides for USD 723 million to be made available over the course of three years, with 10% of the amount withdrawable immediately.

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São Paulo – The International Monetary Fund (IMF) said today (24) that its Executive Board approved an Extended Fund Facility (EFF) agreement with Jordan that will see USD 723 million made available to the Arab country over a three-year period. A USD 72.3 million tranche will be withdrawable immediately.

The EFF is intended for nations at risk of medium-term balance of payment issues stemming from structural problems that cannot be promptly addressed. In Jordan’s case, the problem is the heavy influx of refugees fleeing clashes in neighboring Syria and Iraq, a serious burden on the Jordanian economy and government finances. Close to 700,000 people, or some 10% of the native population, are in need of public services.

The IMF says the cash will be allocated to the country’s economic and fiscal reforms program, which entails debt reduction and creating the conditions for more inclusive economic growth.

Upon concluding technical talks leading up to the agreement last June, the Fund said the program includes promoting better conditions in the labor market, especially for youth and women; enhancing the business environment; ensuring sustainability in the energy and water sectors; continuing reforms to preserve the banking system’s soundness and resilience and foster financial inclusion; and strengthening accountability and governance.

The EFF’s approval comes a year after Jordan and the IMF completed a Stand-By Arrangement (SBA) that saw USD 2 billion be disbursed within three years, which indicates the country’s need for external financing. While the SBA is intended for imminent problems, the EFF is employed in longer-lasting programs.

*Translated by Gabriel Pomerancblum

Khalil Mazraawi/AFP 04/05/2016

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