THE INTERNATIONAL MONETARY FUND (IMF) Said On Friday, May 17, 2024 That It Would Make Available To Tanzania A Credit Of About $150 Million After The Fund And The Respective Authorities Recently Reached A Staff-Level Agreement.
Meanwhile, The IMF Warned
That Foreign Currency Shortages Would Persist In Tanzania This Year, Posing
Risks To Economic Growth That Has Weathered Various Challenges, Including
Serious Power Shortages Late Last Year And Early This Year.
The $150 Million Would Be
Provided Through The Extended Credit Facility (ECF). It Would Bring The Total IMF
Financial Support Under The ECF Arrangement To $604.2 Million.
The IMF Team Also
Discussed The Tanzanian Authorities’ Request To Access, Under The Resilience And
Sustainability Facility (RSF), About $789.6 Million.
“I Am Pleased To Announce
That We Have Reached Staff-Level Agreement On The Policies Needed To Complete
The Third Review Of Tanzania’s ECF-Supported Programme, And On The Request To
Access Financial Resources From The RSF,” Mr Charalambos Tsangarides, IMF Mission
Chief For Tanzania, Was Quoted As Saying In A Statement Released Late On Friday,
May 17, 2024.
The Third Review
Arrangement Negotiations Under The ECF Between The IMF Team And Tanzanian Authorities
Were Held In Meetings In Dodoma And Dar Es Salaam From May 2 To 17, 2024.
The RSF Funds Would Be
Spent To Address Climate Change Challenges.
“The RSF Will Support The
Authorities’ Efforts To Advance Structural Reforms And Investments On
Adaptation And Mitigation To Address Risks And Challenges Associated With
Climate Change,” The Statement Notes.
Foreign Currency
Shortages To Persist
The IMF Statement Said
The Outlook For The Tanzanian Economy Is Favourable, With Growth Expected To
Pick Up To 5.4 Percent In 2024, Supported By Improvements In The Business
Environment And Subsiding Global Commodity Prices.
However, Risks To The
Outlook Persist, The IMF Says, As A Result Of Prolonged Liquidity Issues In The
Foreign Exchange (FX) Market, An Abrupt Global Slowdown, The Intensification Of
Regional Conflicts, And Increased Commodity Price Volatility, Among Others.
During Negotiations, The IMF
Team Observed Some Commitments By Tanzanian Authorities To Cushion Further
Erosion Of The FX Market.
“The Bot Reiterated Its
Commitment To Allow More Exchange Rate Flexibility To Revitalise The FX Interbank
Market And Ensure A Market Determined Exchange Rate, While Limiting FX Interventions
To Avoid Disorderly Market Conditions, In Line With Its Intervention Policy,”
The IMF Statement Notes.
To Enhance The
Transparency Of Its Interventions, The Bot Will Publish The Results Of Its FX Auctions.
“Maintaining A Moderately
Tight Monetary Policy Stance Will Complement Efforts To Ease Pressures In The FX
Market, While Preserving Price Stability,” The IMF Says In The Statement.