MF raises Malawi development program loan by $17 mln

WASHINGTON, July 14 (Xinhua) -- The International Monetary Fund (IMF) will increase its assistance to Malawi under the three-year Poverty Reduction and Growth Facility (PRGF) program by some 17 million U.S. dollars, bringing the total to 79 million dollars.

The decision came after the IMF Executive Board completed its sixth and final review of Malawi's economic performance under the program, an IMF press release said Monday.

The increases funds are expected to help the country meet a larger balance of payments need brought about by higher fuel and fertilizer prices.

The completion of the review enables the release of 24.7 million dollars, which will fully disburse the total amount available under the arrangement.

The three-year PRGF arrangement for Malawi was approved on August 5, 2005 -- originally for a total amount of 62.1 million dollars to support the government's economic program for 2005-2007.

"Helped by favorable weather and debt relief, growth (in Malawi) has been robust, poverty has been reduced, inflation has fallen to single digits, and the debt situation has improved," an IMF official said.

The PRGF is the IMF's concessional facility for low-income countries. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5.5 year grace period on principal payments.