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IMF agrees on $750m loan to Jamaica

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WASHINGTON, Feb 15 AFP

February 16 2013, 06:47AM

The International Monetary Fund has reached an agreement with Jamaica for a fresh $US750 million ($A728.08 million) loan, after the Caribbean country launched a crucial debt swap earlier this week.

"The mission has reached a staff-level agreement with the Jamaican authorities on the key elements of an economic program that can be supported by a 48-month arrangement under the Extended Fund Facility," the IMF said in a statement.

The IMF said the loan could be approved by the executive board by the end of March, "subject to the timely completion of prior actions to be taken by the Jamaican government and obtaining necessary financing assurances."

The agreement came after Prime Minister Portia Simpson Miller and Finance Minister Peter Phillips announced on Monday an ambitious domestic program to swap high-yield government debt for lower-yield paper.

The swap, the country's second debt restructuring in three years, was crucial to lowering the government's debt service burden, which currently sucks up 55 per cent of government spending.

The swap was a condition set by the IMF for a new financing program, said Phillips.