Jamaica has requested access to the International Monetary Fund’s (IMF) Rapid Financing Instrument (RFI), Finance Minister Dr Nigel Clarke disclosed yesterday.

According to Minister Clarke, the decision was taken to access the instrument because the duration of the “global lockdown” to stem the spread of COVID-19 is highly uncertain.

“The open-ended nature of the pandemic and its economic spillovers therefore pose intolerable balance of payments risks to Jamaica that threaten the economic gains of our seven-year reform effort,” Dr Clarke said, even as he pointed to mitigating factors that provide the ability for Jamaica to absorb economic shocks.

These include reasonable stock of foreign reserves and contingency financing options that arise from (i) the availability of cash resources programmed for accelerated debt repayment; (ii) the availability of domestic sources of financing; and (iii) untapped capacity available from other multilateral institutions such as the Caribbean Development Bank, Inter-American Development Bank and the World Bank, including by redirecting existing projects.

The RFI provides rapid financing to IMF member countries with balance of payment needs, but without the requirement of having a fully-fledged IMF programme, ongoing reviews and conditionality.

On April 6, the IMF substantially increased the amounts that member countries could access under the RFI window.

Clarke pointed out that Jamaica, like many other countries around the world, will experience a sharp decline in economic activity as a result of the COVID-19 pandemic. “However, we have a number of options, including the RFI, which will assist Jamaica to endure this period, and emerge stronger, while preserving the macro economic stability that all Jamaicans have worked and sacrificed to achieve,” he said, noting that the RFI, as the name suggests, should result in a quick disbursement in a matter of weeks.

He said in the interest of transparency around Jamaica’s RFI request, he had “taken the decision to release the letter to the IMF managing director now, at the time of the request”.

The finance minister noted that last year Jamaica and the IMF came to an agreement for the fund to continue to maintain an office in Kingston for two years. “This has facilitated a close and open working relationship with frequent exchange of views and information. In particular, I have been in regular communication with the fund over the past few months as the COVID-19 pandemic has grown in intensity,” Clarke explained.