Add us as your preferred source on Google to see more of our content in Search.
Add to Preferred SourcesThe Inter-American Development Bank (IDB) has approved a $200 million policy-based loan to support reforms aimed at boosting economic productivity in Paraguay. The reforms are key to improving inclusive and sustainable growth in Paraguay in a context marked by international financial uncertainty, the economic evolution of its main trading partners and a fall in commodity prices.
The planned reforms incorporate institutional and regulatory changes in the areas of transparency, financial regulation and development of tools to support the private sector, especially for small- and medium-sized companies, keeping in mind the principle of gender equality as a key to enhancing the system’s inclusiveness and depth.
The loan is designed to support reforms aimed at increasing transparency through initiatives to boost people’s access to information in the public sector and improve transparency in commercial transactions and business governance.
The loan also supports measures aimed at improving the workings of the financial system in Paraguay, such as changes to the Banking Law and the charter of the Central Bank — modifications that are designed to strengthen risk-based regulation and oversight of the banking system.
Finally, the program backs up reforms to modernize tools designed to encourage productive development and financial inclusion through reforms of state-owned banks and development plans, the creation of funds to support small- and medium-sized companies and the regulatory framework for secured transactions.
The transaction is a PBL made up of two tranches. The IDB provides this facility to borrowing member states in support of their policies. Disbursement of the funds is contingent on verification of compliance with reforms that are agreed on.
Paraguay’s Finance Ministry will execute the operation and coordinate with the Central Bank, the Financial Development Agency, the Justice Ministry, the National Anti-Corruption Secretariat and other agencies. The ministry will also monitor progress made to comply with the terms of the program.
The IDB loan has a repayment period of 20 years, a grace period of 5.5 years and an interest rate based on the LIBOR.
Original source: IDB
Published on 22 November 2017