Malawi’s request for a Rapid Credit Facility (RPD) has been granted by the International Monetary Fund (IMF), which would enable it to address its foreign exchange problems.
Due to the nation’s high debt levels, the Lazarus Chakwera administration has had difficulty receiving the monies for which it applied under the Extended Credit Facility (ECF).
Malawi will receive half of the money it would have gotten from the ECF under the RCF, nevertheless.
“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 asked the Fund to fund a program to assist with immediate financing needs for the country’s balance of payments (BOP), to restore macroeconomic stability, and to provide the groundwork for inclusive growth that would enhance the lives of Malawians.
Malawi requested a disbursement under the IMF Rapid Credit Facility-Food Shock Window and a Staff Monitored Program with Executive Board Involvement while waiting for the ECF to be approved.
While the government continues to work on debt restructuring, this will assist Malawi in meeting its immediate financial needs and advancing its reform agenda.
“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.
