Honduran central bank approves $1 billion loan to government

The Central Bank of Honduras has approved a $1 billion loan to the country’s government aimed at addressing a serious fiscal imbalance, the central bank announced on Wednesday. In February, the Honduran Congress, under a fiscal and financial emergency decree, authorized the new government of leftist President Xiomara Castro to borrow up to $2 billion, including local and international sovereign bonds. , over the next two years. In addition to financing public investments, the loan is to be used for “internal and external debt service for 2022 and the payment of the second tranche of the sovereign bond which matures in March 2023 for 166.7 million dollars,” the central bank said. in a report.

In February, the central bank lent the government $336 million from special drawing rights funds provided by the International Monetary Fund (IMF) to support external debt service payments. Honduras, the second poorest country in Latin America, faces external and internal debts worth a total of 15.68 billion dollars, which represents 56.7% of the country’s gross domestic product. Some 30% of the national budget is earmarked for debt service, according to finance ministry officials.

The loan was announced during an IMF mission to Honduras, whose government hopes to reach an agreement with the fund for new financing.

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