The International Monetary Fund (IMF) and government officials have reached a technical agreement, which is of utmost importance to Finance & Planning Minister Stanley Raghoebarsing. More than a year passed while the program was paused. Suriname thereby failed the second, third, and fourth assessments. Now that the second review has been authorized, the minister claims that the deal with the holders of the Oppenheimer bonds can now be signed. On June 14, the IMF board will evaluate the accord at a technical level. 53 million dollars will be made accessible if authorized.
With these developments, Suriname exits the junk category it was in when it was unable to pay its debts. Raghoebarsing noted that while reaching a technical understanding does not completely resolve all issues, confidence on a national and international level has been restored. Now it will be simpler for investors to traverse the bridge. There have been advancements.
The minister claimed that the public is uninformed about the failure to pay the bondholders’ debt. Upon taking power, this government was faced with a challenging situation. The cash reserve was depleted after the $1 billion reserve was gone. There was not even enough money in June 2020 to pay civil officials’ salaries. The million dollars had vanished. The Oppenheimer loan of $550 million was obtained at high interest rates of 9.25% and 13%. This year, $200 million in debt was due if it wasn’t restructured. Raghoebarsing also noted that $600 million had to be paid by 2026, which would be problematic. Now, in January of the following year, $30 to $35 million must be paid.
It has been decided that there would be compensation for the 25% loss that the creditors will experience with relation to the royalties of the oil from block 58. Raghoebarsing highlighted that it is not the objective for them to receive a significant payment. He is aware that this is not popular with everyone. The Value Recovery Instrument may be used early and at no additional expense.
