IMF: Malawi requested a four-year loan

The donor-dependent southern African state, one of the world’s poorest, has been experiencing foreign currency shortages.

The International Monetary Fund logo is seen at its headquarters in Washington, DC, US
International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas

Malawi has requested a four-year extended credit facility to help with balance of payment difficulties, the International Monetary Fund (IMF) said.

The donor-dependent southern African country, one of the world’s poorest, has been experiencing acute foreign currency shortages. In May, it allowed its currency, the kwacha to weaken 25 percent against the US dollar.

“The authorities have requested an arrangement (on) the back of the protracted balance of payments problem,” the IMF said in a statement on Monday after talks with Malawian government officials and private sector representatives.

The amount being requested for the credit facility was not stated.

The fund said restoring debt sustainability and resolving a case involving alleged misreporting of foreign-exchange reserves were pre-requisites for IMF support.

“While the authorities are addressing these issues, the IMF team conducted a mission to agree on (a) macroeconomic framework, policies and reforms,” it added.

The IMF said it welcomed the move to normalise the forex market and that Malawi’s authorities had engaged a debt adviser to support efforts to address unsustainable public debt.

Source: Reuters