IMF board approves $178 million loan to Malawi


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The International Monetary Fund’s executive board has approved a loan of about $178 million for Malawi, with an immediate disbursement of about $35 million, the IMF said in a statement on Wednesday.

Malawian authorities reached a staff-level agreement with the fund on the four-year Extended Credit Facility in September.

Earlier this month Malawi devalued its currency by about 30% as it battles severe shortages of fuel, medicines and fertilisers linked to foreign-currency shortages.

“The decision is a big breather for us and our economy,” Finance Minister Simplex Chithyola Banda said in a telephone interview with Reuters.

“Two major benefits expected are the resumption of budgetary support from our traditional donors and the easing of foreign currency supplies,” the southern African country’s finance minister said.

The IMF programme will unlock more financial support from development partners, Malawian President Lazarus Chakwera said in a televised national address late on Wednesday.

The World Bank could give Malawi $60 million for trade finance, a $217 million package linked to fiscal reforms and $250 million for agriculture, Chakwera said.

“These injections of foreign investment from our partners over the next four months will greatly enhance our foreign exchange reserves position and provide the macroeconomic stability needed for economic and business growth,” he added.

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