December 27, 2024
The Government of Panama, through the Ministry of Economy and Finance (MEF), has signed an Uncommitted Revolving Credit Agreement with The Bank of Nova Scotia for up to $200 million. The primary objective of this financing is to partially cover the seasonal liquidity needs of the General State Budget during the fiscal year 2024. According to ministerial resolution MEF-RES-2024-3684, issued on December 23, this line of credit offers flexibility to the Panamanian government due to its open financing structure. The agreement, with a term of three years, establishes an annual interest rate of 1.375% plus the average of the six-month SOFR rate, which as of December 20, 2024, stood at 4.2%.
This credit will enable the government to respond swiftly to liquidity fluctuations during the fiscal year, ensuring favorable conditions in a global financial environment with variable interest rates. The funds will be used not only to cover budgetary needs but also to cover the costs associated with financing. The MEF has committed to including the necessary allocations in each annual budget to guarantee the payment of capital, interest, and other obligations arising from the contract.
With the implementation of this Revolving Credit, Panama strengthens its financial management capacity, promoting stability and sustainability in the execution of the national budget. This strategy ensures that the country’s needs are effectively met, reinforcing confidence in the government’s economic management.
Source: (Newsroom Panama)
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