Deputy Premier Dr Kedrick Pickering has said the United Kingdom’s decision to become a loan guarantor for the BVI is testament that the territory has been doing well financially.
The UK government has offered £300 million in loan guarantees so the BVI can borrow to finance its Recovery and Development Plan.
“They (the UK) trust us to manage our own affairs and because they want to see us get back on our feet as quickly as possible, they are prepared to help us along that path. The way they are prepared to help us is to guarantee us some money,” Dr Pickering reasoned.
“The British Government has said categorically that they see the BVI as a mature country,” Dr Pickering added. “We have been able to manage our affairs well up to this point.”
UK loan guarantee a positive
The Deputy Premier said the territory will benefit from low-interest loan rates thanks to the UK’s triple-A rating, which is the highest possible rating that can be given to a country.
A triple-A rating means there is a strong possibility that the borrowing country will meet its financial commitments – hence being able to access loans at lower interest rates.
“If we went and borrowed money on our own – and there are limitations to that – we would have to borrow money at an interest rate of somewhere between three and five percent depending on where you get the money from,” he said.
“The British government can borrow money on the international market for something like 0.07 percent interest rate,” he reasoned.
“What they are saying is we will use all the goodwill that we have internationally and allow you to borrow the money at these low rates than if you would get on your own. In that regard, we (UK) are prepared to allow you (BVI) to borrow up to £300 million,” Dr Pickering explained.
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