IMF agrees to $178 million for Malawi after currency devaluation

Login

Register

http://www.clubofmozambique.com/

IMF agrees to $178 million for Malawi after currency devaluation

9:21 CAT | 16 Nov 2023

FILE - Pedestrians pass market stalls in Lilongwe, Malawi, on Tuesday, June 26 2018. [File photo Waldo Swiegers/Bloomberg ]

The International Monetary Fund agreed to grant Malawi a $178 million loan to boost its foreign-exchange reserves, support the debt-ridden nation’s revival and catalyze grant financing, a week after the southern African nation devalued its currency.

The 48-month extended credit facility “will support the authorities’ macroeconomic adjustment and reform agenda aimed at restoring macroeconomic stability,” the IMF said in a statement on Wednesday.

Landlocked Malawi is recovering from a series of shocks including its worst-ever outbreak of cholera, a deadly cyclone, high inflation and a shortage of foreign currency caused by the rising cost of imports.

Malawi, which is one of the world’s least-developed countries, is heavily reliant on donor financing. It previously relied on donors to fund about 40% of its budget before they halted payments after a state corruption scandal dubbed “Cashgate” was exposed in 2013.
The country has also been seeking to restructure as much as $1 billion of external debt to qualify for funding from the IMF.

“Successful external debt restructuring is vital as there is no reasonable mix of adjustment and financing alone that can deliver macroeconomic stability,” IMF First Deputy Managing Director Gita Gopinath said in the statement.

Source: Bloomberg