The International Monetary Fund (IMF) on Wednesday approved a Standby Credit Facility of $204 million (approx Rwf159.7bn), that will support government to keep external reserves above the critical level.

The credit facility comes at a time when government is working to tackle diminishing commodity prices and rising import bill that have adversely affected export earnings and put pressure on foreign exchange reserves.

While presenting the budget in parliament yesterday, Finance and Economic Planning Minister, Claver Gatete told MPs that government had requested for the fund as a temporary measure to ensure that the implementation of all extensive medium term policies aimed at addressing the external imbalances.

Prior to approving the standby credit facility, the IMF Executive Board conducted a review of Rwanda’s economic performance where they established that despite in global commodity prices; Rwanda’s growth remained strong in 2015, with a GDP rate of 6.9 percent.

Following the Board’s decision, the Deputy Managing Director of the fund and Acting Chair Min Zhu, noted that Rwanda’s continued strong performance under the Policy Support Instrument has created a platform for high growth and steady poverty reduction.

He however noted that there were challenges brought about by external shocks related to commodity prices and appreciation of the dollar.

He expressed optimism for the future noting that Rwandan Authorities were putting in place appropriate measures. 

"Accordingly, the authorities are taking decisive steps to address external imbalances. First and foremost, through using continued exchange rate flexibility as the principal adjustment tool. This will be supported by tighter fiscal and monetary policies to help curb demand for imports,” Min Zhu said.

editorial@newtimes.co.rw