Contacts: In Washington: Ana Elisa Luna Barros (202) 453-2907 alunabarros@worldbank.org In Tegucigalpa: María Amalia San Martín (504) 239-4551 msanmartin@worldbank.org WASHINGTON, August 7, 2008 –The World Bank’s Board of Executive Directors today approved a US$10 million zero-interest loan to support the Government of Honduras in addressing the food crisis. This credit complements the US$25 million approved three years ago to support the institutional development of Honduras’ financial sector and thereby contribute to the country’s long-term economic growth and poverty reduction efforts. “The strategy adopted by the Government of Honduras to address the food crisis combines actions to support the income of the poorest sectors of the population and to expand the supply of agricultural products, particularly basic grains such as beans, corn, and rice,” said Laura Frigenti, World Bank Director for Central America. “The credit approved today will support the government’s strategy and its efforts to achieve key development goals.” The First Programmatic Financial Sector Development Policy Credit was aimed at reducing the financial sector’s vulnerabilities and improving its institutional health and infrastructure. “This additional support from the World Bank will help sustain the efforts in the financial sector despite the difficulties associated with the current food crisis,” said Aquiles A. Almansi, World Bank Task Manager for the project. The commitment of the Government of Honduras to address the food crisis is particularly important given the current challenges faced by the financial sector as a result of the crisis, since the high food prices impact the consumer loan portfolio and the country’s macroeconomic stability. Sustaining an adequate macroeconomic policy is part of the government’s strategy to maintain a strong financial sector. The US$10 million credit provided by the International Development Association (IDA) has a 20-year maturity and a 10-year grace period.
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