News Brief No. 02/49

News Brief: IMF Management Recommends Augmentation of Uruguay Stand-By

June 18, 2002

Eduardo Aninat, Deputy Managing Director of the International Monetary Fund (IMF), announced today that IMF Management has endorsed the revised letter of intent submitted by the Uruguayan authorities, requesting an augmentation of SDR 1.2 billion (about US$ 1.5 billion) of the 24-month Stand-By Credit of SDR 594.1 million (about US$ 769 million) approved on March 25, 2002. The IMF's Executive Board is expected to consider the authorities' revised letter of intent on Monday, June 24, 2002.

Mr. Aninat said, "The crisis affecting the region has had more adverse effects on the Uruguayan economy than previously anticipated. The Uruguayan authorities have continued to respond decisively to these events, and the revised program they have submitted rightly focuses on strengthening the confidence in the banking system, in particular with the establishment of a special fund (Fondo de Fortalecimiento del Sistema Bancario) to provide liquidity assistance to, or address recapitalization needs of, banks that may require it. IMF Management also strongly commends the measures that the authorities have taken to keep their fiscal program on track, as well as their commitment to deepen the process of structural reform."