After reviewing country’s progress under its USD12 million loan program, the International Monetary Fund on Friday agreed to disburse USD1.8 million (about Rwf 1.02bn) to Rwanda. The review showed that Rwanda’s economic stability had been strengthened. The IMF also waived targets under the sixth review of the program related to guarantees of new high-interest external debt and changes to the multiple currency practices. The IMF said Rwandas response to the global financial crisis has been broadly appropriate, including increased fiscal spending and some easing in monetary policy. The East African country has been hit hard since the beginning of 2009 by a sharp fall in export revenue and a slowdown in economic activity due to the crisis. For the 2009/10 fiscal year, the main challenge will be to cushion the impact of the global economic crisis while preserving fiscal and external sustainability, the IMF said. It also urged the authorities to use available monetary policy instruments, including interest rate and exchange rate flexibility, to support the economy. The monetary program will aim to balance the objectives of achieving single-digit inflation while providing sufficient liquidity to the banking system, the IMF said. A limited transfer of government deposits from the central bank to commercial banks will help sustain long-term credit in the second half of 2009, it added. Ends
