The International Monetary Fund (IMF) has approved about $1.8m for a poverty reduction facility in Rwanda. This money is usually released after the review of a country's performance under a three-year Poverty Reduction and Growth Facility (PRGF) arrangement.

The PRGF is IMF's concessional facility for low-income countries. It is intended that PRGF-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving development partners.

In Rwanda the IMF has just completed its fourth review.

A statement released from the IMF recently said the IMF executive board granted a waiver for the non-observance of a performance criterion on net credit to the government.

The deviation from the target was temporary, resulting from delays in disbursement from a donor and reimbursements in relation to peacekeeping activities. The Board also approved Rwanda's request for a modification of performance criteria for 2008.

Murilo Portugal, Deputy Managing Director and Acting Chair of the IMF said that Rwanda's program performance in 2007 was satisfactory, and that the macroeconomic policy implementation was broadly on track.

"Growth was robust and inflation declined to single digits in the second half of the year.

However, inflationary pressures have reemerged recently, spurred by increasing global fuel and food prices and higher transport costs for imports through Kenya," said Mr. Portugal.

"For 2008, the main challenge lies in managing a grant-financed fiscal expansion without jeopardizing macroeconomic stability. The authorities are committed to making policy adjustments, including a more gradual pace of domestic spending, should inflation accelerate," he added.