Nicaragua begins talks with IMF over new financial aid deal

Reuters News
Posted: Nov 12, 2012 8:41 PM

MANAGUA (Reuters) - Nicaragua has begun talks with the International Monetary Fund over a financial aid package that aims to bolster efforts to reform taxes and pensions, the country's central bank president said on Monday.

Alberto Guevara, president of the central bank of Nicaragua, said he expects the amount of the new financing package could be "similar" to a $120 million package from the international lending organization that expired last year.

"We have a process of dialogue," said Guevara, stressing that no commitments have yet been made by either side. "In terms of accessing IMF resources, that will be determined by the needs of Nicaragua."

Guevara said the country is also working on fiscal changes, including tax, pension and electricity reforms.

"It's important to the Fund that we approach international reserves equal to four months of imports," said Guevara, adding that the IMF wants Nicaragua to keep reserves at that level in order to maintain monetary and fiscal stability.

The four-year $120 million IMF financing package expired in December 2011.

Guevara said that over the next few days the Nicaraguan government would present the IMF with a progress report on tax reforms.

(Reporting by Ivan Castro; Writing by David Alire Garcia; Editing by Lisa Shumaker)