IMF to release $385m loan to Jordan
Amman, April 12, 2013
The International Monetary Fund (IMF) has approved the payment of $385 million to Jordan, in the second tranche of a three-year $2 billion loan programme to help the country push through economic reforms, the finance minister said.
Jordan was hit by a financial crisis last year as foreign aid fell and welfare payments soared, leading it to sign a $2 billion IMF loan deal in July, conditional on budget tightening and unpopular cuts in fuel subsidies and hikes in electricity tariffs.
The latest disbursement comes after an IMF review of the country's economic performance and brings the Fund's loans to Jordan so far to about $770 million.
"It's an extremely positive development, the fact the executive board of the IMF met yesterday and approved the staff report on Jordan and approved the release of the second payment of $385 million," Jordanian Finance Minister Umayya Toukan told Reuters.
Toukan said Jordan was making progress in reducing the budget deficit and streamlining a costly subsidy system, adding that the IMF's endorsement of the country's progress in moving ahead sent a positive signal to investors.
"This is really evidence we are moving in the right direction and we complied with commitments we made in the standby arrangement, and this should give confidence to the markets and international agencies that we are committed to reform," Toukan added.
Jordan's decision last November to cut subsidies on most fuel products sparked violent protests.
The IMF's deputy managing director Nemat Shafik said in a statement following the announcement that the economy was performing well in a tough political environment. - Reuters