Paris Club reduces Honduras outstanding debt by $1.061 billion

By Reshmi Basu

New York, May 13 - The Paris Club creditor countries said they would reduce Honduras' outstanding debt by $1.061 billion as part of an initiative to provide relief to indebted nations.

The Paris Club members are asking their governments to cancel $206 million of the country's external debt as granted under the terms of the Enhanced Debt Initiative for Heavily Indebted Poor Countries (HIPC) as laid out by the International Monetary Fund and the International Development Association.

Additionally, another $855 million will be cancelled in bilateral relief.

The relief will reduce the country's Paris Club debt to $413 million from $ 1.474 billion, according to the release.

The members said the decision reflects the nation's strong commitment toward poverty reduction programs and economic reforms.

The members cited that Honduras had reached its completion point under the enhanced HIPC initiative on April 5.

The IMF estimated that the nation's public debt was $4.8 billion in nominal value at the end of 2003.

Formed in 1956, the Paris Club is an informal group of creditor governments from major industrialized countries.

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