News Brief No. 02/82

News Brief: Joint Statement by IMF, World Bank and Inter-American Development Bank on Uruguay

August 4, 2002

The Managing Director of the International Monetary Fund, the President of the World Bank, and the President of Inter-American Development Bank announced today that they will recommend to their respective boards that financing be increased by amounts that would bring total financing for Uruguay to US$3.8 billion from the three institutions. They also announced that they would recommend accelerating disbursements to Uruguay in order to make about US$1.5 billion available from the three institutions next week when authorized by their respective boards.

In order to provide immediate financing to the Uruguayan government in support of the banking system, the United States government has agreed to provide up to US$1.5 billion in bridge financing to Uruguay's central bank until international financial institution loans are disbursed.

With the help of this new assistance, the central bank of Uruguay will fully back 100% of sight and savings deposits in domestic banks in Uruguay, enabling the Uruguayan people to access their deposits and the payment system to operate effectively.

This concerted response by the international financial institutions should restore confidence of depositors in Uruguay's financial system, and help Uruguay address the intense external pressures it has faced in recent months.

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