The International Monetary Fund (IMF) has approved Malawi’s request for a Rapid Credit Facility (RPD) ) which will help the country deal with forex challenges.
The Lazarus Chakwera administration has been struggling to get funds it applied under the Extended Credit Facility (ECF) due to the country’s debt levels.
However, under the RCF, Malawi will get half of the amount it would have received from the ECF.
“We have obtained 50 percent of our IMF quota, plus we have not abstained anything. We have concluded a mission successfully and now await the board’s approval,” said Finance Minister Sosten Gwengwe.
Malawi requested a Fund-supported program to help address Malawi’s urgent Balance of Payments (BOP) financing needs and restore macroeconomic stability and set the foundation for inclusive growth that would improve the life of the Malawian people.
While waiting for approval on the ECF, Malawi requested a disbursement under the IMF Rapid Credit Facility-Food Shock Window and a Staff Monitored Program with Executive Board Involvement.
This will help address Malawi’s immediate financing needs and support its reform program while the authorities continue to make progress on debt restructuring.
“We had productive discussions with the authorities and made good progress on their request for a disbursement under the Food Shock Window of up to 50 percent of quota and the Staff Monitored Program with Executive Board Involvement. The disbursement under the Food Shock Window combined with the Staff Monitored Program would help address Malawi’s urgent financing needs and support reforms while providing the country with sufficient time to make progress on the debt restructuring process.
“We were reassured by the authorities’ commitment to advance structural reforms and to steer the country towards macroeconomic stability and a sustainable debt path, including through the debt restructuring process underway. We reached broad understandings on the macroeconomic framework and reforms underpinning the Food Shock Window and PMB request,” the IMF said in a statement last week.
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