DOW JONES NEWSWIRES
The Inter-American Development Bank, or IDB, Thursday said it approved a $500 million loan to strengthen the liquidity of Panama's banking system.
The loan will be channeled through Banco Nacional de Panama, a state-owned institution that also acts as a commercial and development bank, the Washington-based multilateral lender said in a press release.
"The funds are expected to partially offset a shortfall in dollar-denominated lending to the productive sector triggered by the current global financial crisis," the IDB said.
Banco Nacional de Panama will act as an intermediary to provide working capital and foreign-trade financing to the industrial sector, the IDB added.
The loan, which expires in five years and has a three-year grace period, will pay a spread of 4 percentage points over the 6-month London interbank offered rate.
The loan is part of a $6 billion program recently created by the IDB to help governments respond to the needs of commercial banks that may face difficulties in accessing foreign and inter-bank credit lines due to the global credit crunch.
The IDB noted that Panama has a solid economy that grew at an average 8.8% between 2004 and 2008, far outpacing the 5.5% regional average.
By Diana Delgado, Dow Jones Newswires; 571-6107044 ext 11320; diana.delgado@dowjones.com
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