The International Monetary Fund is “very advanced” in talks with the Rwandan government on a short-term credit facility to support the East African country if its foreign reserves slide, a senior official said on Thursday.
Rwanda, which relies on farming, foreign aid and modest exports of minerals, has been hit by the slide in global commodity prices and has seen foreign reserves slip while a construction boom has continued to suck in imports.
The central bank does not release timely reserve figures, but one diplomat said they had slipped to about 3.2 months of imports cover. Neighbouring Kenya has more than 4 months cover.
“Our discussions with the Rwandan government are very advanced. We expect this to go forward,” IMF First Deputy Managing Director David Lipton told a news conference on the sidelines of the World Economic Forum on Africa, in Kigali.
“It will take a little while to finalise,” he said, without giving details about the facility or timing of a deal.
Finance Minister Claver Gatete, who spoke with Lipton at the news conference, said Rwanda’s trade balance had been hit by downturn in commodities prices.
“We need a short term facility that can help the central bank to make sure that it can continue to intervene in the market to support the various imports of the private sector,” he said, without commenting on the value of the facility.
An IMF report in January said rebuilding reserves would be “critical to enhance the country’s resilience to future shocks.”