Jordan To Receive US$1.3 Billion In Economic Reform Funding: IMF

Jordan to receive US$1.3 billion in economic reform funding: IMF

WASHINGTON, DC, (UrduPoint / Pakistan Point News / WAM - 26th Mar, 2020) The International Monetary Fund, IMF, announced on Wednesday a $US1.3 billion extended fund facility, EFF, to Jordan.

An IMF Executive board statement said that a 48-month arrangement under the EFF with Jordan would support the country's economic and financial reform programme.

The $1.3 billion funding will also provide spending to contain COVID-19.

"This programme is anchored by critical structural reforms designed to lower electricity costs for businesses and create incentives for them to hire more young people. The aim is to support stronger and more inclusive growth, create jobs, especially for women and young people, and reduce poverty," the IMF statement noted.

Improving the fiscal situation is also needed to stabilise and bring public debt towards more sustainable levels, it added, noting that continued support from donors, particularly through concessional loans and budget grants, will be critical to the programme's success and help Jordan cope with humanitarian and economic needs.

Although the programme was designed before the COVID-19 outbreak, changes were made to the programme to support unbudgeted spending covering emergency outlays and medical supplies and equipment, the IMF explained.

It added that if the impact of the outbreak is deep enough to put at risk program objectives, the programme will be adapted further to the changed circumstances, upon reaching understandings with the authorities.

The $1.3 billion funding represents 270 percent of Jordan's quota of Special Drawing Right, SDR, which is equivalent to SDR926.37 million.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. So far SDR 204.2 billion (equivalent to about US$281 billion) have been allocated to members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis.

The value of the SDR is based on a basket of five currencies the U.S. Dollar, the euro, the Chinese renminbi, the Japanese Yen, and the British pound sterling.

Following the IMF Board’s decision, an amount equivalent to SDR102.93 million (about US$139.23 million) is available for immediate disbursement; the remaining amount will be phased out over the duration of the Fund-supported programme, subject to eight programme reviews, the IMF concluded.

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