Honduras is one of the poorest countries in the Americas and has the world’s highest murder rate, fuelling a surge in child migration to the United States. The government’s debt has more than quadrupled since 2008 amid sluggish growth.
“This (decision) sends a message to investors that you can invest in Honduras with certainty, and that Honduras is doing things well,” President Juan Hernandez said on state television.
The IMF said in a statement that about $113.2 million of the money would be a stand-by arrangement with roughly $75.4 million allocated as a stand-by credit. Nearly $60 million would be made immediately available with the rest accessible in six tranches conditional on semi-annual reviews, it added.
“The arrangements are intended to support the authorities’ economic program, which aims to maintain macroeconomic stability and improve conditions for sustainable economic growth and poverty reduction,” the IMF said in a statement, adding that Honduras did not plan to immediately access the funds.
Hernandez, who took office last year, said the money would be spent addressing social programs and the restructuring of public companies.
The country’s last IMF program, totaling roughly $200 million, expired in 2012, and Honduras had failed to reach another deal after struggling to meet the Fund’s requirements.
It was not immediately clear if the IMF had imposed any new obligations on the country, such as fiscal targets.
The Honduran economy grew 2.6 percent in 2013, and the IMF expects it to expand 3 percent this year, and 3.1 percent in 2015.
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