UPDATE: CAF sells $768 mln in social bonds for coronavirus treatment and economic recovery programs
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Latin American central bankers and regulators have put into action a series of measures aimed at blunting the impact of the coronavirus, COVID-19, as the threat to their citizens and economies grows severe.
These emerging market nations have moved, alongside their developed market peers, to increase local market liquidity, cut interest rates and begin addressing the expected surge in bankruptcies that come as a result of empty restaurants, aircraft and shopping malls, to name just a few of the COVID-19 consequences.
Experimentation with quantitative easing, a first for Latin America, as well as other government fiscal measures to provide cheap loans are just some of the other measures being put into play.
The latest developments are listed below by date.
Click a name to jump straight to that section.
Argentina is issuing updates here on government measures taken against the coronavirus.
March 10: The government created a ARS1.7 billion ($26 million) fund to buy equipment and medical supplies to combat coronavirus.
March 17: The government announced it was increasing funding to its meal programs to secure food and income for the most vulnerable during the pandemic.
March 17: The government announced that it would be excepting companies from payroll taxes and reinforcing unemployment insurance.
March 20: The government set price control on a basket of basic food items to avoid speculative pricing during the pandemic.
March 23: The government created an emergency family income program. Unemployed individuals would receive ARS10,000 ($151) during the month of April.
March 24: The government prohibited banks from closing or suspending overdrawn bank accounts.
March 24: The government suspended temporarily utility service suspensions to due lack of payment.
March 24: Presidency decrees preferential tax regimen for employers providing emergency services in the context of COVID-19.
March 24: Ministry of finance announces extraordinary bonus for pensioners and social security beneficiaries to mitigate the effects of COVID-19; payments of social security loans were condoned for the months of April and May; wage subsidy for formal workers (REPRO program) to secure jobs and alleviate employers; unemployment security; also, suspension of payroll taxes for month of March.
March 24: Ministry of finance announces price controls for 30 days on basket of basic foods, personal hygiene and health products.
March 24: Ministry of finance announces ARS350 billion ($5.2 billion) soft credit line for producers of basic products; ARS320 billion ($4.8 billion) allocation to provide working capital to companies at preferential rates; ARS25 billion ($373 million) allocation for Banco de la Nación credits to producers of food, products for personal hygiene and medical supplies.
March 26: The government changed budget allocations to add funding to medical attention.
March 26: The government prohibited banks from charging for cash machine services.
March 26: The government expanded its credit program for SMEs to cover employee wages.
March 27: The government extends the maturity dates of SME debts.
March 29: Foreclosures are suspended and facilities to pay mortgages are offered.
March 29: Rent payments and evictions are suspended.
March 31: The government expanded a program whereby citizens can buy essential goods through a government-managed online platform.
March 31: The government created an ARS30 billion ($453 million) guarantee fund for SMEs.
March 31: The government prohibited layoffs for 60 days.
March 31: Credit facilities are given to local companies producing medical supplies.
April 1: An emergency program assisting labor and production is created. Companies and workers can postpone payroll taxes or have them reduced by up to 95%.
April 1: Suspension of tolls on roads; import taxes for “critical supplies” are suspended.
April 1: Argentina said it will seek to restructure $83 billion in foreign currency debt with an offer to bondholders that will seek a grace period, an extension in maturities, a reduction in coupons and a potential haircut.
April 3: Government of Argentina extends the period of suspension of payroll taxes due to the COVID-19 emergency to include both the months of March and April.
April 3: CAF donates $400,000 to Argentina to fight Covid-19.
April 7: Argentina postponed payments on $9.8 billion in local-law, US dollar-denominated bonds until Dec. 31.
April 8: President Alberto Fernández said he planned to extend a lockdown of the economy beyond April. 12.
April 8: Fonplata lent Argentina $12 million to fight the effects of coronavirus. This loan brings to $53 million loans from Fonplata to Argentina in the context of the COVID-19 emergency.
April 9: ARS120 billion ($1.8 billion) are assigned to an emergency financing program for the provinces.
April 9: ARS30 million ($453,000) are given in aid to cultural facilities.
April 13: Workplace insurers are required to cover COVID-19.
April 13: Fernández announced that he would make an offer “in the next few days” to restructure $68.8 billion in foreign-currency bonds.
April 14: Argentina carried out a debt swap, issuing new government bonds worth $4.795 billion in a bid to avoid default. The exchange included local Treasury bonds worth 98.328 billion pesos for newly issued debt maturing in 2020, 2021, and 2022. The Economy Ministry said the exchange would cover 90% of debt maturing in April.
April 15: Argentina filed with the US Securities and Exchange Commission (SEC) on Wednesday to issue up to $51.7 billion in debt, a day before it is expected to unveil an offer to restructure as much as $83 billion in foreign-law bonds.
April 15: Argentina asked the Paris Club of creditor nations for a delay in making a $2.1 billion payment due in May, according to a report by the state news agency, Telam.
April 16: Argentina announced a restructuring offer for $68.8 billion in foreign-law bonds, proposing creditors accept a three-year grace period and 62% discount on interest payments. The plan asks that interest payments resume in 2023, starting at an average interest rate of 0.5% and increasing gradually over the years.
April 17: Price controls on basic goods are extended for 30 days.
April 19: The emergency program assisting labor and production is extended until June 30. Companies and workers can postpone payroll taxes or have them reduced by up to 95%.
April 20: Creditor groups reject Argentine government’s initial debt restructuring plan.
April 21: The International Bank for Reconstruction and Development gives Argentina $35 million loan to combat COVID-19.
April 22: New rules were created to expedite government procurement during the emergency.
April 22: Argentina presents a debt restructuring offer to investors for $66 billion worth central government foreign debt in order to garner resources to combat the health and economic effects of COVID-19. The offer asks for a three-year grace period, a 5.5% reduction of capital on bonds, and a reduction of 62% of interest payments.
April 25: The government announced that on April 29 it would add an extraordinary payment to holders of “food cards” to help them through the “critical social situation.” Families with one child would receive ARS4,000 ($60) and families with two or more children would receive ARS6,000.
April 30: government extends until May 31 measures prohibiting banks from closing or suspending overdrawn bank accounts.
April 30: grace periods for social security system loans are extended with the objective of sustaining incomes of the most vulnerable population during the pandemic.
May 3: Economy Minister Martín Guzmán publishes opinion in the Financial Times explaining why the country is seeking to refinance $66 billion worth of foreign public debt. Asserts to bondholders that the proposal prevents “destructive dynamics of the past.”
May 5: Argentina’s Ministry of Finance published a statement with the “context of the process that led to the exchange proposal presented by the Republic of Argentina on April 22, 2020,” one day after bondholder groups reiterated their rejection of the proposed exchange.
May 5: A new formula for estimating electric bill is developed that takes into account the demand for energy of home during the pandemic, protecting the rights of consumers.
May 7: The Inter-American Development Bank announced it will disburse $1.8 billion on to help Argentina in 2020. “This is the largest disbursement to Argentina in 10 years,” the IDB said in a press release. Resources will go to fight COVID-19.
May 7: Ministry of tourism announces a ARG2.8 billion ($41.5 million) program to help pay 200,000 workers in the sector.
May 10: Argentinian central bank announces that companies that do not have loans will now have access to a new subsidized line of credit with 24% interest rates. The bank estimates that 200,000 companies are eligible for this benefit.
May 12: Argentina’s Ministry of Finance established the criteria to be applied in the distribution of ARG60 billion ($888 million) worth of subsidized loans to the provinces. The financial emergency program for the provinces was created on April 9.
May 14: The federal revenue service gives tax payers payment facilities during the emergency. Overdue payments as of April 20 may be paid in six installments.
May 14: The government launches a home building program to create employment. The initiative will cost ARG2.9 billion ($427 million).
May 15: Argentina’s national public contracts office creates rules for speedy acquisitions during the health emergency.
May 16: The Argentinian ministry of commerce extends until June 20 a freeze on the price of a basket of essential goods
May 18: The government of Argentina froze the price of telephone, cellular, internet and TV services until August 31, declaring the services as essential.
May 18: The government of Argentina extends for 60 days the prohibition to lay off workers.
May 19: The Inter-American Development Bank approves $470 million loan to secure access to COVID-related medical attention for 17 million people.
April 17: CAF approved $50 million loan for Bolivia’s Covid-19 emergency.
May 5: Universal cash transfer program begins. In the first week of implementation, individuals between 50 and 60 years of age will receive the transfer. Other age groups will be added by phase over a period of five weeks. The program is expected to benefit 4 million people for a period of three months. The transfer per person per months is of BOB500 ($72) per person.
March 18: Brazil’s central bank cut the benchmark Selic rate by 50 basis points to a record low of 3.75%.
March 23: The central bank and the national development bank BNDES announced a $234 billion package to increase liquidity available to banks, in what Roberto Campos Neto, the head of the central bank, called “the biggest liquidity injection ever announced by the central bank.”
March 25: Brazil outlined a $24 billion spending program to provide healthcare and supplement lost income for informal workers.
March 29: BNDES announced I would be injecting capital into airlines companies, adding BRL40 billion ($7.7 billion) in payroll financing to help up to 1.4 million companies along with BRL2 billion in credit for medical equipment and BRL97 billion in support businesses.
April 2: The central bank said it will offer a special temporary credit line to help banks handle increased demand for credit. The estimated amount of collateral in those credit portfolios could reach BRL650 billion.
April 8: The national development bank BNDES announced a new BRS40 billion credit line to help up to 1.4 million small businesses pay their employees.
April 9: The central bank said it could purchase up to BRL1 trillion ($198.78 billion) of private sector assets to boost liquidity and increase availability of credit to companies impacted by COVID-19. Assets that could be purchased through the program include debentures, real estate credit notes (CCI), certificates of real estate receivables (CRI), agricultural receivables certificates (CRA), commercial notes, bank credit note (CCB) and credit rights funds.
April 13: Brazil’s chamber of deputies approved a BRL80 billion ($15.5 billion) financial aid package for city and state governments to make up for lost tax revenues during the coronavirus pandemic.
April 15: Brazil´s Treasury Secretary Mansueto Facundo de Almeida said the fiscal deficit could reach BRL 600 billion ($114.5 billion) and national debt as much of 90% of GDP as a result of efforts to fight the COVID-19 pandemic.
April 15: The Economy Ministry announced that due to the COVID-19 emergency the federal government of Brazil had simplified procedures to facilitate the approval and disbursement of resources from development banks for projects and programs in the public sector.
April 15: The federal government established new, temporary, procurement rules to facilitate the acquisition of medical supplies during the pandemic.
April 17: The government announces all products imported by air or postal service to combat the pandemic with a value of up to $10,000 will not pay import taxes until September 30. A list of 141 products to fight the pandemic were also except from import taxes.
April 17: The Economy Ministry said that the measures to fight coronavirus added up to BRL1.169 trillion ($220 billion). Of these, BRL212 billion go to serve vulnerable families, BFL133 billion to help states and municipalities, BRL24.3 billion to buy medical supplies, and BRL524.4 billion to secure cash flow and employment in companies.
April 20: State-owned savings bank Caixa Econômica Federal and the small business association Sebrae announced on Monday a new credit line for small businesses in Brazil.
April 27: The government of Brazil suspended until September 30 a set of requirements from companies to contract credit operations with public institutions. The objective is to speed up processes during the coronavirus crisis.
April 28: Brazil announced it had invested BRL1 billion ($185 million) to purchase health supplies and equipment to fight COVID-19.
April 30: Federal government announces zero tariffs on imports of 81 products to combat COVID-19.
May 4: Employment and income preservation program is implemented. Employees will be paid in proportion to reduction of working hours or for temporary suspension of employment contract; hourly or independent workers will receive the benefit in accordance to their registration in the social security system.
May 6: Brazil’s Senate approved BRL60 billion ($10.5 billion) COVID-19 aid package to cities and states to help them pay for social welfare programs threatened by loss of revenue from a declining economy. Bill needs President Jair Bosonaro’s signature.
May 7: President Bolsonaro signs into law BRL2 billion ($343 million) in federal aid for non profit hospitals and “santas casas” to be used in actions to combat COVID-19.
May 8: The list of products that can be imported without tariff payments is expanded.
May 11: The Government of Brazil expands a differentiated procurement regime to increase efficiency of government contracting during the pandemic.
May 12: Ministry of Finance extends period of deferment of taxes due in May, June and July.
27 May: Brazilian President Jair Bolsonaro issues a provisional measure providing a BRL15.9 billion ($3.01 billion) emergency credit line for micro and small companies.
Chile’s securities regulator issues updates here on measures taken combat COVID-19 pandemic.
March 16: Chile’s central bank decreased interest rates by 75 basis points to 1%.
March 19: President Sebastian Piñera announced a $11.7 billion stimulus package, spending the equivalent to 4.7% of GDP, and introduced it in Chilean congress on March 23.
March 23: The central bank announced the creation of a conditional credit facility (FCIC) providing a special financial line to banks, with incentives for refinancing loans to homes and companies. On Thursday, the bank approved the norms that regulate this facility and announced the activation of a liquidity credit line (LCL). The two credit lines are for up to 3% of the banks’ commercial and consumer portfolio.
March 27: Congress approves a law to provide cash transfers to families. The program includes families that are already receiving subsidies and adds another 670 thousand low income homes to the program. The measure is expected to benefit 2 million homes that do not have formal jobs. The estimated cost is $170 million.
March 27: Chile’s congress approved raising debt shelf by $4 billion to help finance the government’s emergency plan to fight COVID-19.
March 31: Congress approves a law to protect employment as part of an emergency economic plan to face the pandemic.
March 31: The central bank decreased interest rates by 50 basis points to 0.5%.
April 8: Piñera announced the creation of a $2 billion fund to distribute more resources and create more employment in low-income sectors. The program is expected to benefit 2.6 million workers in the informal sector.
April 8: Piñera and the central bank announced the creation of a government-guaranteed $24 billion credit line for small businesses and entrepreneurs.
April 8: The central bank offered liquidity lines to non-banking financial institutions.
April 13: Piñera announced the terms for government-guaranteed loans to SMEs. The amounts will be equivalent of three months of sales; the loans will last 24 to 48 months with a six-month grace period; and the maximum interest rates will be 300 basis points over the benchmark rate. All companies with less than UF25,000 ($852,960) in annual sales are eligible for the program.
April 20: Piñera announced an emergency COVID-19 family income initiative that will benefit 4.5 million individuals in 1.8 million homes. The emergency income will be handed out for three months. The cost of the program was not announced, but it is part of a $17 billion dollar package to protect employment, SMEs, and family income, and to finance temporary tax credits.
April 21: Chile’s central bank take “exceptional measures” in reaction to the impact of internal and external shocks to the Chilean economy. The measure include injections of liquidity, interventions in the foreign exchange market, FX swaps and liquidity lines with credit incentives.
April 27: The ministry of finance presented Compra Ágil, a program whose purpose is to facilitate the participation of SMEs as government contractors. The program will be applied to all acquisitions for values below CLP1.5 million ($1,773), which represent 80% of all central government acquisitions.
April 28: President Piñera announced the launching of a $3 billion guarantee fund for small entrepreneurs by BancoEstado. The program will offer guarantees for up to $24 billion dollars and will benefit 99.8% of companies in the country and protect 84% of employment.
April 29: President Pinera signs into law a bill to protect 1.2 million independent workers, putting in place a new income protection insurance system that will benefit self-employed individuals whose incomes fall by at least 20%.
May 4: President Piñera announced one-time cash payment to alleviate financial stresses on more than 1 million pensioners. CLP87 billion ($104 million) is allocated for this program.
May 5: Chile issues $2 billion worth of debt in both US dollars and euros to help it fight against the economic ructions caused by the COVID-19 pandemic. In January the government said it had completed its 2020 financing plans after a massive $3.8 billion green bond issuance.
May 7: President Pinera announced the injection of $290 million to municipalities to fight COVID-19.
May 12: Chile’s central bank requested a $23.8 billion line of credit with the IMF.
May 13: Chile’s central bank said it intended to extend its services to various types of nonbank financial institutions “to enable it to more closely manage and mitigate financial stability risks.”
May 18: President Piñera announces “Food for Chile” program that will secure food for 2.5 million homes during the pandemic.
March 23: Colombia’s central bank announced measures of quantitative easing; a first time in the region with this type of measure.
March 23: The Finance Ministry announced the creation of an emergencies mitigation fund (FOME). Days before it committed $2.98 billion for the fund.
March 24: Colombia announced a subsidized loan program through state-backed agency Findeter and government-owned lender Bancóldex to finance project and initiatives that try to impede the spread of the disease.
March 27: The central bank cut the benchmark interest rate half a percentage point to 3.75%. That same day, the bank announced a $400 million auction of FX swaps to be held on March 30 and authorized additional measures to reinforce liquidity in pesos.
April 3: Finance Minister Alberto Carrasquilla said the government was allocating COP15 trillion ($3.7 billion) from the country’s savings funds (FAE and Fonpet) to tend to the “sanitary, productive and humanitarian emergency,” adding that issuing new debt would be inevitable.
April 6: State-backed development bank Findeter launched a COP713 billion credit line to underpin private companies and municipal and state governments affected by COVID-19. Of these, COP461 billion were allocated as 7-year loans with a 2-year grace period for working capital needs. Another COP252 billion were allocated to 12-year loans with a 2-year grace period for investment needs. Beneficiaries were given access to these loans through financial intermediaries whose interest rates were capped at 2% above Findeter’s interest rates.
April 6: The Finance Ministry announced the creation of a new COP12 trillion special guarantees program to mitigate the impact of COVID-19 on the business sector. Through this program, the government will guarantee small business loans serving liquidity requirements to pay for personnel and fixed costs.
April 7: The Finance Ministry announced a program of cash transfers for 3 million households that are not in the regular cash transfer programs. Each household will receive COP160,000 in the month of April.
April 9: The IMF executive board met in an informal session to discuss Colombia’s request to renew its Flexible Credit Line (FCL) with the same level of access as the 2018 arrangement for $10.8 billion in special drawing rights (SDRs).
April 9: Colombia announced the suspension of tariffs on corn, sorghum and soy until June 30 to decrease the cost of production in the agricultural sector.
April 13: The Finance Ministry announces a measure to recover the COP10 trillion ($2.58 billion) in lost tax income from the coronavirus outbreak.
April 14: The central bank cut bank reserve requirements by $2.3 billion, starting April 22. Savings and checking accounts now require reserves of 8%, down from 11%. Fixed-term savings accounts of 180 days reserve requirement cut to 3.5% from $4.5%. Bank to purchase up to 2 trillion worth of TES Treasury bonds by end of April, will participate in TES forward market in bid to inject liquidity into the economy.
April 15: President Iván Duque decreed that all banks in Colombia are required to buy “solidarity bonds” from the government to raise money for the recently created Emergencies Mitigation Fund, or FOME.
April 16: The government levied a “solidarity tax” on public employees making more than COP10 million ($2,515) per month.
April 16: The Finance Ministry said the National Guarantees Fund, or FNG, will provide guarantees for loans held by SMEs and microenterprises to cover working capital and payroll costs.
April 27: The ministry of finance swapped COP1.5 trillion ($369 million) worth of 2020 bonds for bonds maturing in 2027 and 2037 to decrease financial volatility.
April 29: Colombian development bank Findeter opened a working capital line of credit for utility companies at 0% interest so that they can defer for 36 months payments from low income clients during the pandemic. Utility companies will have three years to pay back, with a three month grace period.
April 30: Colombia’s central bank announced it had lowered to 3.25% from 3.75% its policy interest rate.
April 30: Colombia development bank Findeter announced a COP500 billion ($126 million) credit line to alleviate working capital needs of state and local governments.
May 6: Customs authority invites 27,247 tax payers to benefit from tariff reductions for a total value of COP1.2 trillion ($302 million) in response to the economic emergency.
May 7: Government declares a second economic emergency to continue mitigating the effects of the pandemic. The government will subsidize 40% of minimum salary and 20% of receipts for companies. The subsidy will have a cost of COP2 trillion ($507 million) per month, and a total of COP6 trillion over a period of three months.
May 11: Colombia’s ministry of finance announced new measures to increase liquidity, decreasing margins for market makers to 30 basis points from 50 basis points for peso-denominated treasures bonds, and to 40 basis points from 50 basis points for UVR-denominated treasury bonds.
May 11: Colombia’s presidency decreed the creation of a program to support formal employment. The program will subsidize 40% of minimum wage equivalent of dependent worker’s salaries whose income has decreased by 20% or more.
April 29, The IMF approved Costa Rica’s request for $504 million in emergency financial assistance to help support essential COVID-19 related health spending and relief measures.
May 26: Dominica announces 1% interest loans to small businesses to help in their reactivation after the coronavirus closedown. The government has allocated XCD5 million ($1.9 million) worth of local resources to this project. With the partnership of World Band and IFM, income support and small loans facility funds total XCD20.7 million.
March 16: The central bank decreased interest rates by 100 basis points, to 3.5% from 4.5%.
March 27: The Finance Ministry announced it would allocate RD32 billion($591 million) to a package to protect the population’s health, preserve employment, protect companies during the pandemic.
March 30: The government announced it would be using $150 million from an existing contract with the World Band to tend to needs of the Dominican populated affected by the coronavirus.
March 26: As a measure to mitigate the effects of COVID-19, the central bank increased liquidity facilities to RD$50 billion from RD$30 billion through 90-day repos at a 5% interest rate; it also decreased reserve requirements for banks, and increased liquidity facilities in foreign currency to $400 million from $300 million.
April 2: The government announced that it would begin to transfer cash to low income families staying at home during the pandemic. The payments program is due to start April 3 and is expected to benefit 1.5 million families at a cost of RD$17 billion ($314 million).
April 6: The Finance Ministry announced the implementation of a cash transfer program for 295,180 formal workers in the private sector. A total of DOP1.2 billion ($22.2 million) have been allocated to this program.
April 14: The Finance Ministry announced that it was preparing a set of measures to reactivate the Dominican economy once the country got past the pandemic. The plan is being developed in collaboration with the IMF, the US Federal Reserve and the Bank for International Settlements.
April 23: Dominican Republic central bank announced: 1) decrease of policy interest rate to 3.5% from 4.5%; 2) decrease of repo interest rate to 4.5% from 6%; 3) decrease of overnight rate to 3.5% from 3%; 4) liquidity window for SMEs for RD20.6 billion ($379 million).
April 28: The ministry of finance announced that it is evaluating the mechanisms to create a guaranteed funding program for SMEs.
April 29: the IMF approved $650 million in emergency assistance to the Dominican Republic to address the COVID-19 pandemic through the IMF’s rapid financing instrument.
May 12: The Dominican Association of Pension Funds (ADFP) acquired RD$40 billion ($726 million) worth of Treasury bonds to be used to fight the impact of COVID-19 on workers and the most vulnerable.
May 21: Dominican Republic gets €20 million from the French Development Agency (AFD) for a sustainable socioeconomic project in the country’s northern region. AFD said the project will help the country reactivate and be resilient after COVID-19.
March 23: The IMF announced: 1) that Ecuador intended to seek support from the funds rapid financing instrument to address balance of payment needs and address needs of sectors most affected by COVID-19; 2) that the IMF was working with Ecuador on a successor fund-supported arrangement building on the current one.
April 1: The Finance Ministry announced that the most affected sectors – tourism, airlines, agricultural exporters, exporters of goods and tax payers in Galápagos – would be able to differ income and value added tax payments due in April, May and June. Companies with revenues of up to $300,000 in 2019 will also benefit from this tax deferment.
April 2: The Finance Ministry announced that all individuals and SMEs could differ payments for 60 days at no additional cost and without interest, expenses or fines. Borrowers will also be able request refinancing or restructuring of debts within 120 days of the announcement.
April 8: The Finance Ministry asked investors to accept deferred interest payments on more than $800 million in bonds until August 15.
May 7: Ecuador gets $500 million loan from the World Bank to strengthen its COVID-19 response and stimulate the economy plus a $6 million grant to help Venezuelan refugees.
May 8: The Latin American Development Bank (CAF) approved $400 million in loans for Ecuador.
May 12: Ecuador gets a $93.8 million loan from the Inter-American Bank (IDB) to support micro and small businesses and employment during COVID-19 crisis.
May 14: The Government of Ecuador announced the implementation of the second phase of the emergency cash transfer program for low income families created by decree on March 21, adding 150,000 families to the program for a total of 550,000 families. All families with incomes below $400 a month would receive a one-time $120 dollar cash transfer to help them through the health emergency.
May 16: Ecuador’s national assembly approves a new public finance law seeking to assure fiscal sustainability.
May 19: The Inter-American Development Bank approves a $250 million loan to Ecuador to improve detection of the COVID-19 pathogen. This is the second in a $700 million COVID-19 lending program first announced by IDB on April 16.
April 14: The International Monetary Fund (IMF) granted $389 million in emergency financial assistance to El Salvador, the first loan to the Central American nation in more than 30 years.
April 21: Guatemala sold $1.2 billion worth of cross-border bond. A total of $500 were social bonds to be investment in combating COVID-19.
April 17: The IMF executive board approved $111.6 million in emergency financing for Haiti.
March 31: The IMF disbursed $144 million in emergency financing to Honduras for the COVID-19 pandemic.
April 3: Congress voted to allow the government to issue an additional $2.5 billion in debt to fund the response to COVID-19.
April 21: CABEI activated $200 million credit for Honduran Central Bank.
May 7: IMF staff proposes to increase fund support for Honduras by $222 million to a total of $530 million.
April 16: Jamaica’s Minister of Finance and Public Service, Nigel Clarke, sent a request to the IMF for access to its Rapid Financing Instrument to help alleviate a balance of payments risks.
March 20: A week in advance of the scheduled day of decision, Mexico’s central bank lowered interest rates by 50 basis points to 6.5%. That same day, the central bank loosened rules for banks on minimum deposits in the central bank and announced a lowering of interest rates for the central bank’s ordinary additional liquidity facility.
March 20: Mexico’s ministry of finance announced new rules for market-makers to promote depth and liquidity in the local debt market.
March 26: The finance ministry announced new measures to lessen the effects of COVID-19 in the financial and insurance sectors. These included changes in accounting rules to make it easier to defer capital and interest payments to financial institutions.
March 31: Mexico’s central bank announced the implementation of a $60 billion swap line program with the US Federal Reserve (Fed). The first auction is scheduled for April 1.
April 1: Mexico places $5 billion for a period of 84 days in first auction of greenbacks provided by the Fed through a $60 billion swap line program. Ten banks participated with orders totaling $6.32 billion. The weighted average interest rate in the transaction was 0.9056%. This is the first auction in the $60 billion program created on March 19 by the Fed to provide dollar liquidity to Mexico’s banking system in response to market volatility and the weakening of the peso that followed falling oil prices and the COVID-19 shock.
April 3: Mexico’s central bank announced that the second auction of greenbacks from the $60 billion swap line program is scheduled to take place on April 6. Up to $5 billion will be auctioned for a period of 84 days.
April 18: The securities commission announced that it would be allowing insurance companies to change policies to cover the effects of COVID-19 on policyholders.
April 21: Mexico’s central bank announced it would offer MXN750 billion pesos ($31 billion) in liquidity and credits to support the country’s financial system. It also cut the benchmark lending rate by 50 basis points to 6%. The central bank is forecasting a 5% contraction in the economy in the first half of 2020 versus the same period a year ago.
April 22: President López Obrador announced a MXN622.6 billion ($24.6 billion) package to create two million jobs and to protect 70% of Mexican families during the pandemic, and to execute other social projects to mitigate the effects of the pandemic on the population.
April 22: Mexico issues $6 billion in US-dollar-denominated debt at a discount, with order books 4.75 times the size of issuance. The government issued debt maturing in 2025, 2032, and 2051.
April 27: The government of Mexico changes pricing rules for electric services to protect families from paying higher electric tariffs due to increased consumption derived from having to spend more time at home.
May 13: President López Obrador announces plan to reopen the economy.
March 26: Panama sold $2.5 billion worth of bonds in the cross-border market to combat the coronavirus.
April 3: CAF donates $400,000 to Panama to fight COVID-19.
April 14: Panama said it secured $1.3 billion in funding from the IMF, the World Bank and the Inter-American Development Bank (IDB) to help small businesses and job creation.
April 16: The IMF approved $515 million in emergency funding for the COVID-19 pandemic.
April 20: CAF lends $50 million to Panama to strengthen is capabilities in response to COVID-19.
May 6: CAF approved long-term loan for Panama of up to $350 million under the contingent credit line to support countercyclical measures to fight the COVID-19 pandemic.
March 26: The Paraguayan president signed into law a bill COVID-19 emergency bill authorizing the executive to borrow an additional $1.6 billion to fund a fiscal package designed to mitigate the economic and social effects of the coronavirus.
April 21: The IMF approved an immediate disbursement of $274 million (100% of its SDR quota) to help Paraguay meet balance of payment needs. In addition to the balance of payment needs, the IMF said the money will help the government preserve resources for fighting COVID-19 healt-related expenses and social safety net spending, while also “catalyzing multilateral donor support.”
April 23: Paraguay issued $1 billion worth of 10-year debt in an effort to boost finances in its fight against the COVID-19 pandemic. The debt was authorized by an emergency law passed in early April.
May 19: Inter-American Development Bank approves line of credit up to $250 million for Paraguay, executed through three loans. Only one loan for $105 million targeting the building of a sewer and clean water project is approved as of May 19th.
March 19: Peru’s central bank decreased interest rates by 100 basis points, setting interest rates at 1.25% from 2.25%.
March 20: The central bank injected PEN400 million ($119 million) for two years through a repo at a 3.24% interest rate.
March 25: The Finance Ministry announced the creation of a $87.7 million fund that would allow small and medium-sized businesses to pay existing working capital credit lines and restructure or refinance their debts.
March 26: The central bank loosens reserve requirements in local and foreign currency. It also approved a new instrument to inject liquidity in companies: a loan portfolio, with the state serving as guarantor, for working capital needs.
April 3: CAF donates $400,000 to Peru to fight COVID-19.
April 4: President Martín Vizcarra issued a decree to allow 4.8 million low-income households to postpone electric, gas and telecommunications service payments for March.
April 6: The Finance Ministry initiated Reactiva Perú, a program with PEN30 billion in working capital loans.
April 9: The central bank cut its benchmark interest rate to a historic low of 0.25%. The bank expects inflation at the lower end of its 1% to 3% target range. Economic stimulus plans announced by the government amount to roughly 12% of GDP.
April 12: The government extends for another 14 days the suspension of certain procurement procedures for goods and services related to the prevention and spread of COVID-19.
April 16: Peru issued $3 billion worth of international bonds to raise sash to help in the battle to contain the COVID-19 pandemic.
April 19: The government authorized a cash subsidy for below poverty level of PEN760 ($224.2). Resources totaling PEN835 million were transferred to the Ministry of Development and Social Inclusion.
April 22: The ministry of finance approved Reactiva Peru, a program than proves credit guarantees to companies. The measure had been first announced on April 6.
April 24: Peru’s central bank decreased repo interest rates to 1.02% from 1.13%.
April 29: Peru’s ministry of finance said that as of April 27, the government had allocated PEN67 billion ($9.4 billion) to contain the economic effects of COVID-19.
April 29: A decree was issued in Peru authorizing budgetary reallocations and temporary procedures and standards to expedite the procurement of protection equipment in the public sector.
April 30: The government of Peru decreed that companies would benefit from a suspension or substantial reduction of income tax payments in the months of April, May, June and July, as a measure to secure their short term liquidity.
April 30: Through an emergency decree, Peru’s ministry of finance got permission to sell up to $4 billion in cross-border bonds.
May 7: Peruvian central bank took measures to protect the value of pension funds and their affiliates, giving them temporary permission to sell local Treasury bonds to the central bank.
May 8: The Ministry of Finance extended to five years from four years, the period in which companies can compensate for losses in income tax filings.
May 13: The Peruvian government expanded the Reactiva working capital loans guarantees program for companies to PEN60 billion ($17 billion) from PEN30 billion.
May 20: Government of Peru transfers PEN39 million ($11.4 million) to municipal government to help them prevent contagion of COVID-19 in markets and dining halls.
Trinidad and Tobago
April 3: CAF donated $400,000 to Uruguay to help it fight against the spread the coronavirus and its effects.
April 19: Fonplata approved $15 million in financing for a small business emergency loan program in Uruguay.
April 27: Fonplata granted $200,000 to Uruguay to purchase medical equipment to fight Covid-19.
May 5: CAF approved a $50 million loan to Uruguay to be used to fight the spread of COVID-19 and mitigate its effects in public health and the economy.
May 18: World Bank approved $20 million in emergency funds for Uruguay.
The International Monetary Fund (IMF) is publishing research and policy notes under a new section: SPECIAL SERIES ON COVID-19. It is also providing a special lending tracker, detailing the emergency finances it is providing to combat the pandemic.
Five nations in the LAC (Latin America and Caribbean) region are slated to receive funding from either the IMF or World Bank. Argentina is receiving $35 million via the World Bank; Ecuador is receiving $20 million from the World Bank; Haiti is receiving $20 million from the World Bank; Honduras is receiving $135 million from the IMF; Paraguay is receiving $20 million from the World Bank.
March 25: The IMF and World Bank requested that Group of 20 nations put on hold the debt payments made by some of the poorest countries, if asked, in order to let them focus resources on fighting the spread of the deadly novel coronavirus, COVID-19. Taking aim at the International Development Association (IDA) nations, the multi-lateral lenders issued a joint statement saying these countries, which are home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty, will need relief.
March 25: IDB Invest announces plan to contribute $5 billion in financing for companies affected by the pandemic.
April 3: IMF Managing Director Kristalina Georgieva said some members have asked about “something that de facto goes into quantitative easing from the world. And it is by allocation of additional SDRs (special drawing rights) to boost liquidity” in emerging markets. She also admitted that the bank falls short on one particular instrument: “to provide short term liquidity to countries that are basically strong but may find themselves in a tight place.”
April 9: Georgieva said the IMF sees trillions of dollars in financing needs to deal with the impact of the coronavirus outbreak in emerging markets.
April 10: Georieva says in a podcast with The Economist magazine that the United States is not interested in expanding the use of Special Drawing Rights, the IMF’s official currency unit. Expanding the amount of SDRs would give the IMF more financial firepower to get money to member nations. According to unnamed sources, Reuters reported the Trump Administration actively opposes the extra issuance because it would provide China and Iran with additional resources with now conditions.
April 13: IMF agreed to immediate debt relief for 25 member countries under the Catastrophe Containment and Relief Trust (CCRT). The initial relief provided for immediate use by these nations is SDR157.1 million, or $213.4 million. This approval (given by the IMF’s Executive Board on April 15) allows disbursement of grants from the CCRT for repayment of total debt service falling due to the IMF over the next six months, with potential extensions, up to a maximum of full two years from April 14, 2020, subject to availability of sufficient grant resources. CCRT could grow to $1.4 billion. Haiti is the only country in the LAC region included in this first list. CCRT rules amended in March, allow up to two years of debt service relief. CCRT has $500 million available, including new pledges from Great Britain ($185 million), Japan ($100 million), China (undisclosed), Netherlands (undisclosed).
April 14: G7 nation finance officials support temporary debt service relief to poorest nations if joined by China and other G20 nations, Paris Club creditors.
April 15: G20 finance ministers agree to suspend debt service payments for world’s poorest nations through Dec. 31, 2020. Freezing principal and interest expected to provide nations with $20 billion to redirect toward health systems to fight pandemic.
April 15: Georgieva said fund is making a push to triple concessional financing to $18 billion for the Poverty Reduction and Growth Trust (PRGT).
April 24: IDB Invest said it priced $1 billion worth of bonds in its largest debt sale ever, raising money for a $5 billion lending program for companies impacted by the coronavirus pandemic.
April 22: CAF announced it the bank would be helping mitigate the effects of coronavirus in the Latin American region through agile financial and technical instruments; the effort includes a regional line of credit for $2.5 billion for countercyclical economic measures.
April 27: IDB President Luis Alberto Moreno tells LatinFinance that IDB Invest will increase private sector lending to $7 billion from $5 billion. Listen to full interview here. IDB Invest issues press release formally outlining the increase the following day.
April 30: World Bank provides US$10.5 million to Saint Lucia for COVID-19 response
May 1: World Bank announces $10.5 million in aid to support Saint Lucia’s COVID-19 response.
May 5: The World Bank provided $412,000 to Suriname to purchase essential medical supplies for the country’s emergency response to the COVID-19 pandemic.
April 30: The IMF agreed to add $90 million to an extended fund facility for Barbados and also to lower the primary fiscal surplus target to 1% of GDP to give the country more flexibility to combat the coronavirus pandemic.
May 13: legislators from 25 member countries urge the World Bank and the IMF “to provide extensive debt relief and financial assitance for all impoverished nations most at risk of the devastating human costs and the long-lasting economic injuries of COVID-19.”
May 27: Latin American development bank CAF sold €700 million ($768 million) worth of five-year social bonds to finance coronavirus-related healthcare spending and emergency economic support to its member countries.
IMF/World Bank – World Economic Outlook Growth Projections for 2020 and 2021 (released April 14, 2020)
Latin America and the Caribbean
BRAZIL: May 13: Brazil’s government lowers 2020 GDP forecast. Expects contraction of 4.7% with recovery to pre-crisis levels of December 2019 not occurring until 2022. Bank of America said it expects a deeper economic downturn in Brazil in 2020, forecasting now a 7.7% contraction from the previous forecast for 3.5% contraction. Maintains 3.5% GDP growth in 2021.
COLOMBIA: May 4: Colombia’s Central Bank said in a policy report released on Monday May 4, that it predicts the economy will contract between 2% and 7% in 2020.
May 19: Goldman Sachs forecasts Latin America’s economy to contract 7.6% in 2020, doubling from March 27 forecast of a 3.8% decline. Prior to the pandemic it was calling for growth of 1.6%. During the 2009 financial crisis, the region’s economy contracted 2.1%. It contracted 2.4% during the 1983 debt crisis.
GDP forecast update by country:
Argentina -8.5% (May 19) from -5.4% (March 27. Prior to the crisis it was -1%)
Brazil to -7.4% (May 19) from -3.4% (March 27 forecast. Prior to the crisis it was 2.2%)
Chile to -4.4 (May 19) from -3% (March 27 forecast. Prior to the crisis it was 1%)
Colombia to -6.0% (May 19) from -2.5% (March 27 forecast. Prior to the crisis it was 3.4%)
Ecuador to -7.5% (May 19) from -5.7% (March 27 forecast. Prior to the crisis it was -0.3%)
Mexico to 8.5% (May 19) from -4.3% (March 27 forecast. Prior to the crisis it was 1%)
Peru to -8.0% (May 19) from -2.5% (March 27 forecast. Prior to the crisis it was 3.3%)