Guatemala Seen Getting IMF Help

Guatemala is considering negotiating an IMF stand-by arrangement, according to JPMorgan, which cites the fund’s Central America representative Alfred Schipke. “An official IMF delegation is scheduled to travel to Guatemala City later this month to formalize the offer, which is already under consideration by the central bank,” says JPMorgan. “Given that Guatemala is facing no immediate balance of payment issues, the stand-by agreement would be treated as precautionary, part of an overall strategy to enhance market confidence in the government’s policies and to strengthen the country’s financial defenses in the midst of the global crisis,” it adds. The shop notes that while size is uncertain, Guatemala’s IMF quota stands just north of $300m and El Salvador recently inked a similar stand-by worth three times its quota. “We welcome the prospects of a precautionary stand-by for Guatemala at a time when access to international credit sources is severely constrained,” JPMorgan concludes.