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IMF approves $1.3 billion loan for Jordan, adjusts for coronavirus expenses

AMMAN (Reuters) – The International Monetary Fund said on Wednesday its board had approved a four-year, $1.3 billion loan program for Jordan, signaling confidence in the country’s reform agenda at a time it was taking measures to cushion its economy from the fallout of the coronavirus outbreak.

The extended fund facility program was anchored by Jordan’s commitments to make structural reforms designed to lower electricity costs for businesses and create incentives for them to hire more young people, the IMF said.

“The aim is to support stronger and more inclusive growth, create jobs, especially for women and young people, and reduce poverty,” the IMF said in a statement.

The program was designed before the coronavirus outbreak, but the IMF said changes were made to support unbudgeted spending covering emergency outlays and medical supplies and equipment.

“If the impact of the outbreak is deep enough to put at risk program objectives, the program will be adapted further to the changed circumstances, upon reaching understandings with the authorities,” the IMF said.

The IMF said the approval would immediately make available about $139.2 million for disbursement, with the remaining amounts phased over the life of the program, subject to eight reviews.

Jordanian Finance Minister Mohammad Al Ississ told Reuters earlier that the loan had been approved. He said in a statement that loan and associated reforms would help Jordan attract more donor and investment funds.

“It signals confidence in Jordan’s economic reform process, and support for our efforts to mitigate the impact of the virus on vulnerable economic sectors and individuals,” Al Ississ said.

Officials are worried the coronavirus crisis, which has hit the thriving tourist sector, will slash growth projections and deepen an economic downturn and a slowdown in domestic consumption. The tourist sector generates around $5 billion annually.

The monetary and fiscal authorities have taken a series of measures from injecting over $700 million in liquidity to reducing interest rates and delaying bank loan installments and customs and tax payments to help soften the negative impact.

The IMF’s approval of Jordan’s programme was testimony to the macroeconomic stability of a country where regional conflict in recent years has weighed on investor sentiment, Al Ississ said.

Al Ississ said late last year that a new IMF deal would help the country secure concessional grants and loans at preferential borrowing rates to ease annual debt servicing needed to reduce the debt to GDP ratio.

Public debt has shot up by almost a third in a decade to 30.1 billion dinars ($42.4 billion) in 2019, equivalent to 97% of GDP.

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Jordan eases nationwide curfew and allows shops to open

AMMAN (Reuters) – Jordanian Prime Minister Omar Razzaz said on Tuesday the government would allow people to go on foot to buy groceries in neighbourhood shops to ease daily life for the nearly 10 million inhabitants under a tight curfew to stem the spread of the coronavirus.

The curfew was imposed on Saturday after King Abdullah enacted an emergency decree giving the government sweeping powers to enforce an army-imposed curfew and other measures that restrict civil and political liberties. The government justified the severe restrictions by saying that many people had flouted calls to stay at home, risking the fast spread of the virus.

Shops, bakeries and even pharmacies have since closed in a complete lockdown of businesses and commercial activity, and the army, which was deployed on streets across the country, warned that anyone leaving their homes would face up to a year in jail.

Razzaz said that as of Wednesday people would be allowed to leave their homes from 10 a.m. to 18:00 p.m. to walk to corner shops, groceries, bakeries and pharmacies.

“I understand the worry and anxiety. … The curfew is not a natural state that we have ever experienced before and reflects negatively and psychologically on us,” Razazz said.

Large supermarkets will reopen on Thursday to sell goods online and to be home-delivered, also to avoid crowding in public places, Razzaz said in a briefing.

Razzaz warned any stampede or rush in any shops would prompt immediate closure. He said the ban on private vehicles would be maintained.

“Either there is discipline or we will close shops that we see congestion,” he said.

Jordan a week ago closed land and sea border crossings with Syria, Iraq, Egypt and Israel, and suspended all incoming and outgoing flights.

The government brought in public transport buses on Tuesday to help bakeries sell bread in residential neighbourhoods across the country. But panic buying in some inner city areas erupted as people rushed from their homes for bread, which many Jordanians consume as a daily staple food item, witnesses said.

Health Minister Saad Jaber said on Tuesday that confirmed cases of the virus jumped to 153, with 26 new cases in the biggest daily rise since numbers began to steadily grow last week. There have been no deaths.

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