The International Monetary Fund Executive Committee has approved the final disbursement of the Special Credit Facility worth US$ 25.8 million (about Rwf22 billon.)
This followed the review of the Policy Support Instrument (PSI) which was approved in June 2016.
The Special Credit Facility is provides financial assistance to low-income countries with short-term balance of payments needs.
IMF’s Deputy Managing Director and acting chair Tao Zhang said that Rwanda’s had made significant progress under the instrument in regards to reduce external imbalances.
“Rwanda’s Performance under the SCF arrangement and PSI-supported program has been strong and the country has made notable progress in reducing external imbalances which has helped safeguard macroeconomic stability and improved prospects for long term growth,” Zhang said.
In June 2016, in the face of external shocks to the economy, the IMF executive board approved an 18 months Standby Credit Facility worth US$ 204 million to offset the impact of low commodity prices by boosting Rwanda’s foreign reserves.
The Minister of Finance and Economic Planning, Claver Gatete said during the period of support, the government had been implementing policies towards reducing the trade deficit, including greater exchange rate flexibility among public spending restraint other approaches.
“Over the last 18 months, the government has been implementing policies towards reducing the trade deficit, including greater exchange rate flexibility, public spending restraint, prudent monetary policy and the “Made in Rwanda” policy to encourage domestic production of certain goods,” he said.
The external account has registered an increase in coverage of reserves to above 4 months of imports, from 3.6 per cent in 2015, following a strong improvement in exports of goods and a modest reduction in imports.
Under the Policy Support Instrument, Rwanda was addressing private sector development, exports promotion, domestic resource mobilization, and financial sector development.