The International Monetary Fund (IMF) released a statement on Tuesday, confirming the approval of a new 14-month Stand-by Credit Facility totaling $262 million for Rwanda. This financial arrangement is designed to assist the East African nation in managing the adverse effects on its balance of payments resulting from climate-related shocks.
The International Monetary Fund (IMF) team and the Rwandan government have mutually agreed on the requisite policy measures essential for completing the second reviews of the existing Policy Coordination Instrument and the program within the Resilience and Sustainability Facility.
According to the IMF, the combination of recurring droughts, the severe floods in May 2023, and the tightening of global financial conditions is compounding the difficulties arising from the legacy of the COVID-19 pandemic. In light of this, the newly established facility will play a crucial role in assisting Rwanda with its post-flood reconstruction initiatives.
In June, the IMF announced that Rwanda, in collaboration with international development banks, was in the process of mobilizing an extra 300 million euros (equivalent to $319.62 million) to support the country’s endeavors in adapting to the challenges of climate change.
In August, the central bank implemented a 50 basis point increase in its benchmark interest rate, setting it at 7.5% (RWREPO=ECI), with the primary aim of sustaining a declining inflation trend. Annual inflation (RWCPIY=ECI) had dipped to as low as 11.9% in July, but it subsequently rose to 12.3% in August and further to 13.9% in September.