Rwanda: First Reviews Under the Policy Coordination Instrument and the Arrangement Under the Resilience and Sustainability Facility, Request for the Modification of End-June 2023 Quantitative Targets, and Rephasing of Access Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Rwanda

This paper presents Rwanda’s First Reviews under the Policy Coordination Instrument and the Arrangement under the Resilience and Sustainability Facility, Request for the Modification of End-June 2023 Quantitative Targets, and Rephasing of Access under the Resilience and Sustainability Facility. Rwanda’s economy had robust growth in 2022, but the overlapping crises have eroded policy buffers. The outlook remains subject to high uncertainty and the costs of the humanitarian response and reconstruction of damaged infrastructure in the wake of the recent disastrous floods will add to existing spending pressures. Rwanda’s commitment to building socio-economic resilience and efforts to transition to greener growth is commendable and should be sustained. Immediate policy priorities need to focus on implementing a strong policy mix that can prevent macroeconomic imbalances from becoming entrenched. The front-loaded fiscal policy adjustment, decisive monetary tightening, and greater exchange rate flexibility are needed to contain inflationary pressures and promote external stability.