CABEI approves program to cushion effects of fuel price hikes on regional economies
The US$800.0 million initiative will focus on member countries in the Central American region.
Tegucigalpa, April 26th, 2022.- In view of the increase in fuel prices worldwide, this Tuesday the Central American Bank for Economic Integration (CABEI) approved indicative financing of up to US$800.0 million for the "Temporary Support Program for the Rise in Fuel Costs in the Founding and Regional Non-Founding Countries".
The initiative seeks to protect the purchasing power of the Central American population, mitigating the immediate effect that high fuel prices have on final consumers and producers. It also seeks to strengthen the expectations of economic agents and the credibility of monetary policy management, both of which are fundamental elements in consumption and investment decisions.
"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, our support expands the countercyclical capacity of monetary authorities to manage rising inflationary pressures," said CABEI Executive President, Dr. Dante Mossi.
Of the amount approved for the Program, each founding and non-founding regional country may receive financing of up to US$200 million with CABEI's regular resources, which could also be increased based on the participation of external sources of resources according to their respective guidelines.
The operation is part of CABEI's 2020-2024 Institutional Strategy in its Sustainable Competitiveness axis in order to promote 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.