IMF staff reaches a staff-level agreement with Rwanda for a Resilience and Sustainability Program (RST), accompanied by a Policy Coordination Instrument (PCI)

IMF staff reaches a staff-level agreement with Rwanda for a Resilience and Sustainability Program (RST), accompanied by a Policy Coordination Instrument (PCI)

October 6, 2022

End-of-mission press releases include statements from IMF staff conveying preliminary findings after a country visit. The views expressed in this statement are those of IMF staff and do not necessarily represent the views of the IMF Executive Board. Based on the preliminary findings of this mission, staff will prepare a report which, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

  • IMF staff and the Rwandan authorities have reached a staff-level agreement on a 36-month Policy Coordination Instrument (PCI) and a Resilience and Sustainability Facility (RSF) to support the country’s economic policies and reforms. Rwanda. Rwanda is the first African country to enter into a staff-level agreement to access the Resilience and Sustainability Trust (RST).
  • Rwanda’s strong political track record and well-advanced climate strategy provide a solid foundation for an impactful reform agenda. The new CIP, combined with funding from the FSR, will support the authorities’ efforts to maintain macroeconomic stability, advance structural reforms, including climate change adaptation and mitigation, and guard against downside risks.
  • Under the agreement, which is subject to IMF Executive Board approval, Rwanda will have access to SDR 240.3 million (about $310 million) under RST.

Washington D.C.:
An International Monetary Fund (IMF) mission, led by Haimanot Teferra, held meetings with the Rwandan authorities in Kigali from September 26 to October 7, 2022, to discuss the authorities’ request for support under the Resilience Facility. and Sustainability (FSR) and one accompanying the new Policy Coordination Instrument (ICP) for a period of 36 months. At the end of the mission, Ms. Teferra made the following statement:

“The Rwandan authorities and an IMF team have reached a staff-level agreement on policies and reforms under a new policy coordination instrument and a 36-month Resilience and Sustainability Facility, with a requested access of 150 percent of quota (SDR 240.3 million). The CIP would support the authorities in their efforts to build on the progress of the macroeconomic, fiscal and financial reforms initiated under the CIP approved in 2019. The financing of the FSR will help the authorities to advance their efforts to build resilience to climate change . The agreement is subject to approval by IMF management and the Executive Board. Board consideration is tentatively scheduled for December 2022.

“The Rwandan economy has recorded robust growth despite an unfavorable global environment. IMF staff estimates GDP growth at 6.8% in 2022. Rising global commodity prices and weak domestic food production pushed inflation up to 15.9% in August, prompting the bank Central Bank to raise the policy rate by 100 basis points to 6%. Budgetary performance for FY21/22 was in line with expectations. The financial system remains healthy, liquid and well capitalized. The exchange rate remained stable while reserves were comfortably above 4 months of potential imports.

“Looking ahead, tackling high inflation, long-term development needs and emerging climate risks remain a political challenge in a highly volatile global environment. To support the recovery of the economy, emphasis will need to be placed on policies aimed at preserving debt sustainability, increasing fiscal and financial resilience to adverse shocks, as well as reforms aimed at mitigating the scars of the pandemic and increase productivity growth.

“Rwanda remains vulnerable to shocks and uncertain external prospects. High global energy and food prices will continue to fuel domestic inflation and weaken the external position. Reduced availability of concessional resources and increased social protection needs will put pressure on fiscal balance and limit policy space to address development needs and address climate change.

“Discussions on reform priorities under the CIP focused on strengthening the fiscal framework, maintaining the implementation of a credible and effective forward-looking monetary framework, and mitigating the scars of the pandemic, while building resilience to future shocks. The authorities should maintain macroeconomic stability and strengthen their policy frameworks, while pursuing structural reforms to ensure more inclusive, resilient and sustainable growth.

“The reforms supported by the FSR will help the authorities to advance measures aimed at integrating climate-related considerations into the design of macroeconomic policies and frameworks, improving the management of climate-related risks for financial institutions and strengthening the disaster risk reduction and management framework. Although Rwanda has a well-advanced climate strategy, it still needs to strengthen its institutions to achieve and track its ambitious climate goals and mobilize additional resources.

“The staff team is grateful for the authorities’ excellent cooperation and the frank and constructive discussions and reaffirms the IMF’s support for the government’s efforts to implement its economic reform program.”

IMF Communications Department

PRESS OFFICER: Tatiana Mossot

Call: +1 202 623-7100E-mail: [email protected]

@IMF Spokesperson

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