Honduras tackles COVID-19 with IDB support

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TEGUCIGALPA, Honduras – Honduras will ensure the sustainability of its public finances, increase social spending on the COVID-19 crisis and protect its monetary and financial stability with a $76.2 million loan from the Inter-American Development Bank (IDB).

The budgetary support loan will help finance efforts to contain the pandemic, mitigate its effect on poor households, and promote counter-cyclical policies that will ease the crisis’ short-term effect on the economy.

The operation is in line with a stand-by agreement of the International Monetary Fund (IMF) that was approved last year. At the same time, the loan supports government action to move forward with structural reforms designed to ensure fiscal sustainability and monetary and financial stability, in a bid to encourage inclusive economic growth.

The aid is structured as a Special Development Loan, to be disbursed all at once. Sixty-five percent of the loan carries a 0.25 percent interest rate and a grace and payback period of 40 years. The rest has an interest rate pegged to the LIBOR, a grace period of three years and a reimbursement period of seven years.

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