WASHINGTON, Dec 28 (NNN-MERCOPRESS) — After concluding the fourth review of the Policy Coordination Instrument (PCI) with Paraguay as well as the second one on the Resilience and Sustainability Facility (SRS), the International Monetary Fund (IMF) approved a disbursement of US$186.28 million in Special Drawing Rights (SDRs) representing nearly US$ 245 million to help the South American country’s green energy matrix expansion.
In addition, Paraguayan authorities remain committed to strengthening macroeconomic stability, advancing its structural reform agenda, and maintaining a close policy dialogue with the IMF regarding the PCI, in which Paraguay has shown a “solid” performance, a document from the IMF mentioned while highlighting the Baa3 rating granted by Moody’s in July.
The Fund found that Paraguay’s Central Bank (BCP) maintained “adequately” a monetary policy interest rate “on hold”, which ended 2024 at 6% per annum. It also indicated that reforms to increase tax revenues and the efficiency of public spending, improve governance, reduce corruption risks, and improve the business climate will help to achieve sustainable and inclusive growth.
For the IMF, activity in Paraguay “continues to be dynamic,” reflecting “high consumer confidence” and the expansion of the services and manufacturing sectors.
“More than 85% of Central Bank surveys indicate that it will be a better year. The Government will continue working to guarantee economic stability, reduce inflation, and direct resources to the most sensitive sectors so that the citizens perceive the change,” Paraguay’s Economy Minister Carlos Fernández Valdovinos said.
“This achievement is the result of a sustained effort over several governments. However, it is not the end of the road, but the beginning of a new stage,” he added. “This recognition not only improves our international image but also allows us to generate more effective public policies and attract investments that have a direct impact on the quality of life of Paraguayans.”
As a result, President Santiago Peña signed into law the law approving a US$ 400 million credit line with the IMF to shore up the 2025 budget amid heavy criticism. Law 7412 ”approves a financing line in special drawing rights under the Resilience and Sustainability Facility program of the International Monetary Fund (IMF).”
Basically, it establishes a credit line for Special Drawing Rights (SDR) for US$ 302,100,000, which is tantamount to about US$ 400 million to be used for next year’s National Expenditure Budget. — NNN-MERCOPRESS