News Brief No. 02/44

News Brief: IMF Managing Director Horst Köhler Signals Increased Support for Uruguay

May 28, 2002

The Managing Director of the International Monetary Fund (IMF), Mr. Horst Köhler, today indicated his willingness to propose a significant increase in IMF financial support to Uruguay. He welcomed the impressive steps taken by the authorities to reinforce the foundations for sustained growth in the Uruguayan economy. An IMF mission will travel to Uruguay shortly to negotiate on an accelerated basis a strengthening and increase of the current IMF-supported stand-by arrangement. Speaking after IMF staff informally briefed the IMF Executive Board, Mr. Köhler said:

"Deputy Managing Director Eduardo Aninat, accompanied by IMF staff, held discussions with the Uruguayan authorities in Montevideo at the weekend on Uruguay's IMF-supported stand-by arrangement. The resolve of the authorities and the actions already taken to deal with the current situation deserve continued international support. I am particularly impressed by the determination shown by President Batlle and the Congress to seize this opportunity to strengthen the dynamism of the Uruguayan economy.

"During these discussions, Uruguay requested an augmentation of the arrangement in the context of the steps they are taking to protect the country's banking system against international contagion. In response to this request and the authorities' demonstrated commitment to reform, an IMF mission will travel to Uruguay shortly to negotiate a strengthening and augmentation of the program. Following a successful conclusion of these negotiations, I would be prepared to propose an augmentation of the stand-by to the IMF's Executive Board, which could consider the matter in the middle of June."

The World Bank and Inter-American Development Bank are expected to make announcements on their programs of support in the coming days.