IMF Approves $2.7B Line of Credit to Panama

IMF Approves $2.7B Line of Credit to Panama

The International Monetary Fund (IMF) on Tuesday said it approved for Panama a $2.7 billion line of credit. This was to address the coronavirus pandemic.

Under its Precautionary and Liquidity Line (PLL), its executive board approved the two-year arrangement. This will become its insurance against extreme external shocks that the pandemic’s economic fallout causes.

The lender cited Panama’s sound economic fundamentals, strong institutional policy frameworks, long track record of good economic performance and policy implementation. These were in determining the Central American country’s eligibility for PLL.

Furthermore, the line of credit will help support what the IMF described as an adequate level of spending. This includes health care and other social programs designed to aid Panama from the pandemic blow it suffered.

In the statement, IMF Deputy Managing Director Mitsuhiro Furusawa, commended the government’s pandemic containment efforts to date. He complimented its approval of deficit spending to ensure more funds reach healthcare services.

Hedge Fund Elliott Management to Shutter HK Office

Elsewhere, known for its activist bent, U.S. hedge fund Elliott Management is closing its 20-strong office in Hong Kong. It has moved responsibility for Asian investment decisions to London and Tokyo over the past three years.

The Hong Kong workforce was being moved to London and Tokyo, said the 44-year-old firm.

However, the closure does not signal a shift in investment priorities. Though the decision is being made mostly for efficiency reasons, it coincides with rising political tension in Hong Kong.

Elliott’s office has shrunk down from about 100 over the last three years, with the Hong Kong-based portfolio managers moving elsewhere.

Elliott has invested in independent Hong Kong lender Bank of East Asia pursuing a campaign to demand reforms. That includes urging the bank to put itself up for sale. 

In 2020, legal proceedings between the two were put on hold as the bank said it would review its assets. It later added it would initiate a sale of its insurance business.

As activist investing becomes more common in Japan, Elliott has bought stakes and pushed for changes in companies. These include SoftBank Group Corp, hotel chain Unizo Holdings Co Ltd, and now-merged Alpine Electronics Inc. and Alps Electric Co.

Japan, like some other countries in the region, hopes to lure banks and asset managers from the former British colony. That’s after tough new security legislation prompted some companies to assess their operations there.

However, few have publicly moved operations staff after the new measure. Financial regulators in Hong Kong said it would not affect companies’ operations. These regulators returned to Chinese rule in 1997.

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