Honduran Congress approves $2 billion loan under new leader

TEGUCIGALPA, Feb 16 (Reuters) – Honduras’s Congress has authorized the government to borrow up to $2 billion in 2022 and 2023 of domestic and foreign debt under an emergency fiscal and financial decree aimed at easing fiscal imbalances, officials said on Wednesday.

The decree will also allow the government to meet the maturity of a $166 million sovereign bond scheduled for March 15 by accessing support funds from the International Monetary Fund (IMF) held by the Central Bank of Honduras (BCH). said Deputy Finance Minister Elizabeth Rivera.

The initiative was proposed by new left-wing president Xiomara Castro, who when she took office on January 27 said she had taken over a “bankrupt” state from conservative President Juan Orlando Hernandez. , who ruled for eight years.

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“Congress has approved an executive order authorizing the government to borrow, including through the issuance of sovereign bonds, up to $2 billion this year and next year to address fiscal and financial issues,” he said. Deputy Speaker of Congress Hugo Noe told Reuters.

Noe, a former finance minister, said the emergency fiscal and financial decree passed on Tuesday also authorizes the government to use $335 million in special drawing rights (SDRs) provided by the IMF and held by the central bank to be used for the execution of the budget. .

Elizabeth Rivera, the deputy finance minister, told the unicameral Congress that the executive order will allow the central bank to transfer the $335 million in SDRs, which will be used to pay the $166 million bond maturity scheduled for March and the rest to finance budgetary expenditure in the first quarter of the year.

Honduras had a total public debt of $15.679 billion at the end of 2021, representing 59.3% of gross domestic product, according to finance ministry figures.

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Reporting by Gustavo Palencia Writing by Drazen Jorgic Editing by Robert Birsel

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