The IMF’s executive board March 17 approved a $790 million stand-by arrangement for El Salvador, a precautionary loan to replace one that is expiring. The three-month agreement is aimed at helping the Central American country deal with the aftermath of the global crisis, which sapped inflows from trade and remittances. The fund-sponsored program will seek to boost domestic demand with countercyclical measures this year, including modernizing roads and increasing electricity output, the IMF said in a statement. The IMF also said it hopes the deal will bolster investor confidence in the government’s ability to ensure fiscal and debt sustainability. “The authorities’ fund-supported economic program is appropriately underpinned by the strategy of continuing to support domestic demand in 2010, while safeguarding debt sustainability through a medium-term fiscal consolidation plan,” said Murilo Portugal, deputy managing director and acting chair of the board. (Dow Jones)

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