IMF APPROVES STANDBY LOAN TO COSTA RICA

IMF APPROVES STANDBY LOAN TO COSTA RICA

The International Monetary Fund has approved a $75 million standby loan to Costa Rica, restoring the country to the good graces of the international lending community.

The government already has access to $270 million in loans from the Inter- American Development Bank earmarked largely for the repayment of outstanding debt to the Paris Club countries.While government officials said they probably won't need the IMF standby loan, they stressed it is a stamp of approval for its policies.

The World Bank in February canceled a program of loans after the government failed to implement agreed-upon reforms. Many in the private sector questioned the capability of 40-year-old President Jose Maria Figueres and his administration to manage the government and the economy.

"This accord shows foreign and domestic investors that the IMF believes the government is managing things well," said well-respected economist Eduardo Lizano.

The reforms call, among other things, for measures to cut inflation next year to 10 percent from the current 18 percent.