Wednesday, 27 April 2022 14:25

CABEI to finance US$800 million to countries in the region in response to rising fuel prices

Written by Evelyn Alas

In response to rising fuel prices worldwide, the Central American Bank for Economic Integration (CABEI) approved an indicative financing of up to US$800.0 million for the "Temporary Support Program in the Face of Rising Fuel Costs in Founding and Non-Founding Regional Countries".

The initiative seeks to protect the purchasing power of the Central American population by mitigating the immediate effect that high fuel prices have on end consumers and producers. It also seeks to strengthen the expectations of economic agents and the credibility of monetary policy management.

Executive President, Dante Mossi, said that the current increase in oil prices adds to the negative effects that the COVID-19 pandemic generated in the economy, misaligning global supply and demand through the disruption of supply chains. In this context, CABEI is extending support by expanding the countercyclical capacity of monetary authorities to manage rising inflationary pressures.

Of the amount approved for the Program, each founding and non-founding regional country may receive up to US$200 million in financing from CABEI's regular resources, which may also be increased depending on the participation of external sources of resources according to their respective guidelines.

The operation is part of CABEI's Institutional Strategy 2020-2024 in its Sustainable Competitiveness axis with the aim of promoting the strengthening of the economic, social and institutional factors that determine the regional capacity to effectively insert itself into world markets beyond the merely commercial sphere.