17 October 2008
The presidents of the IDB, CAF and FLAR met with the intention of giving signals to the region that there are significant resources to make them available to Latin American countries beyond the resources available regularly. The total amount of contingency resources put together by the three institutions accounts for $9.3 billion to provide greater liquidity to financial markets in the region.
At a press conference held on October 13, 2008, the presidents of the Inter-American Development Bank (IDB), the Corporación Andina de Fomento (CAF) and the Fondo Latinoamericano de Reservas (FLAR) met with the intention of giving signals to the region that there are significant resources available to Latin American countries beyond those that exist regularly. In this sense, IDB President Luis Alberto Moreno, announced the Liquidity Program for Growth Sustainability with the approval of $6 billion for quick disbursement to eligible countries to be determined on a case-by-case analysis to mitigate liquidity problems in the financial markets of each country. Additionally, the IDB plans to approve $12 billion for 2009 for projects and social programs. The average annual discharge of loans for projects and programs of the IDB is about $8 billion. With this, the IDB plans to inject a total of $18 billion in resources to the region.
Furthermore, the president of CAF, Enrique Garcia, announced that there are resources beyond those that exist already. The CAF approved a credit line of $1.5 billion to increase liquidity in the Latin American financial markets. In addition, Garcia announced an upgrade in their current short-term credit lines from $1.5 billion to $2 billion. The CAF also announced that for traditional programs it expected to approve $7.5 billion for the region. Therefore, a total of $1.6 billion in loans for the period 2008-2009 is expected to be approved.
Similarly, the president of FLAR, Rodrigo Bolaño, announced the availability of $1.8 billion in resources and possible addition in the coming months of $2.7 billion for a total of $4.5 billion to mitigate problems of liquidity and balance of payments.
The three institutions agreed that although Latin America is much more prepared to handle such crises than in previous years, it is important to take immediate measures to help the region to confront the financial crisis that represents a serious external shock for Latin America.