Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

234 appeared that the first drawdown of IMF resources would not take place before early in 1992. The Bank was concerned as well that agreement had not been reached on the public sector wage freeze for the next negotiating period and that temporary advances to Government had remained above the statutory limit for longer than usual. It was around this time that there was a suggestion to offer Treasury Bills to Government’s creditors. This move was intended to address public sector arrears, the high level of overdrafts in the banking system and the NDA. If Government paid its arrears, creditors would be encouraged by their banks to reduce their overdrafts instead of spending on goods and services. Meeting the early targets With the delay in getting the programme approved, all efforts were made to ensure that the end-December targets would be met, since this was considered by the IMF as a prior action. 116 Thanks to timely inflows from the sale of assets and the loan from the Royal Bank of Scotland, it was possible to make the initial payment to the Japanese bond-holders. As it turned out, the performance targets were all met. Achieving the NIR target, which had been reduced to $9.2 million to take into account partial amortisation of the yen bond, was assisted by inflows from a loan secured by Barbados Sugar Industries Limited. However, there were some concerns that the fiscal deficit had been achieved largely through expenditure cuts rather than by increased revenues. The attainment of the targets for December 1991 helped to remove much of the doubt the IMF held about the commitment of the Barbadian authorities. In effect, the country had run a shadow programme without the assistance of the Fund. The Stand-by Arrangement and access to the CCFF were approved by the IMF’s Board of Directors on February 12, 1992. The Board commended the Barbadian authorities on the tough actions they took, particularly in dealing with Government finances and lauded the commitment to the fixed exchange rate. Total funding from the loan facility amounted to about $116 million, with all of the financing