Rwanda and the staff of the International Monetary Fund have reached a staff-level agreement on the first review of their Extended Credit Facility programme, paving the way for around 35.7 million dollars, subject to a decision by the Executive Board expected in December.
The staff-level agreement does not yet constitute final approval or a disbursement. The tranche corresponds to SDR 26.433 million and is part of a 38-month programme approved in June for a total of SDR 185.031 million, or about $250 million at the time of its adoption.
The Rwandan authorities say they met all quantitative targets set for end-June. The budget deficit was brought down to 4.8% of gross domestic product in fiscal year 2025-2026, and foreign exchange reserves cover around four months of imports.
The economy grew by 9.7% in the first half of 2026, driven in particular by diaspora remittances and a narrowing of the current account deficit. The government expects growth of 7.8% over the whole of 2026, followed by 7.2% in 2027.
This expansion is, however, accompanied by a sharp rise in prices. Annual inflation reached 15.7% in August, well above the National Bank of Rwanda's medium-term target of 5%. The authorities attribute the acceleration to earlier price pressures, higher oil and fertiliser prices, and disruption linked to the conflict in the Middle East.
The central bank has tightened monetary policy to contain inflation expectations. This makes credit more expensive for households and businesses, but the authorities believe that sustained double-digit inflation would weigh more heavily on purchasing power and investment.
The IMF calls for continued fiscal consolidation, stronger domestic revenue and better prioritisation of externally financed projects, while protecting social spending. Rwanda remains classified at moderate risk of debt distress and is seeking to rebuild safety margins as budget support declines.
The Executive Board may modify or delay the disbursement if conditions are not met. Forecasts remain exposed to commodity prices, trade tensions, geopolitical risks and possible climate shocks linked to El Niño.