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Mozambique and the IMF team reached a staff-level agreement on the economic and financial policies that can enable the southern African country a bailout. This follows the approval of the First Review of the program under the Extended Credit Facility (ECF) arrangement between the IMF and the state officials
Mozambique and the IMF team reached a staff-level agreement on the economic and financial policies that can enable the southern African country to get a bailout. This follows the approval of the First Review of the program under the Extended Credit Facility (ECF) arrangement between the IMF and the state officials.
The ECF is a cushion extended to countries with protracted balance of payments problems. All quantitative and structural benchmarks set for the first review have been met. Good progress was made on the broader structural agenda, although the macroeconomic environment remains challenging, according to the review report. The authorities will continue implementing their ambitious economic reform agenda, including a sovereign wealth fund law, reform of public sector remuneration, and the amendment of the public probity law.
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Now the agreement awaits the approval of the IMF Executive Board in December. This would enable the disbursement of about US$63.8 million. The IMF welcomed the Bank of Mozambique’s (BM) response to contain inflation and termed it a proactive step. The (IMF) granted May a 43 million euro loan to Mozambique. That was the first accommodation given to the country after it was involved in the “hidden debt” scandal involving the government.
