The International Monetary Fund (IMF) will be providing US$8.7 million for Dominica to be drawn from the Rapid Credit Facility (RCF) as the island rebuilds following the battering it took from Tropical Storm Erika in late August.
The RCF provides immediate financial assistance with limited conditionality to low-income countries with an urgent balance of payments need. Financing under the RCF carries a zero interest rate, has a grace period of 5.5 years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.
IMF deputy managing director Mitsuhiro Furusawa, says he recovery and rehabilitation costs will be substantial, putting tremendous pressure on already challenging fiscal and balance of payments positions.
The IMF official said that the Dominican authorities have committed to generating robust primary surpluses over the medium term to ensure downward debt dynamics.
“They will tackle pressures on current spending, broaden the revenue base, strengthen tax collection, further re-prioritize capital expenditures, and step up efforts to strengthen the fiscal policy framework to ensure the sustainability of the fiscal adjustment effort.”
He said the authorities are also committed to strengthening financial policies to tackle regional and domestic vulnerabilities, both in terms of the health of financial institutions and their supervisory and regulatory frameworks.