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Purpose of the function
Under the Policy Support Instrument, the country agrees to implement a set of policies designed to maintain macroeconomic and financial stability, and accelerate growth, with sustainable domestic and external debt. These commitments, including specific conditions, are described in the Country’s letter of intent and in the Memorandum of Economic and Financial Policies (MEFP).
The IMF team visits the country to gather information and hold discussions with government and central bank officials, and often private investors, members of parliament, and civil society organizations. Upon its return, the mission submits a report to the IMF's Executive Board for discussion. The Board's views are subsequently summarized and transmitted to the Country's authorities. The ultimate objective of surveillance is to help the Country achieve financial stability and sustainable economic growth, thus make the Country a destination for investing.
Description of the function
Performance under the PSI is reviewed bi-annually. Prior to each review, the Macro unit prepares and reports (using the questionnaire sent by the IMF one month ahead of the mission arrival, running the macroeconomic model) information on the economy, micro and macroeconomic policies, fiscal and monetary policies, administrative information etc. for discussion and negotiation.
During the review process, the Fund team assesses the Country’s economic performance and program prepared by the Macro Unit and the National Bank of Rwanda and conducts policy discussions with different stakeholders.
At the end of the IMF mission, the Minister of Finance and Economic Planning and the National Bank of Rwanda issue a Letter of Intent addressed to the Managing Director of the IMF which requests the endorsement of the policies under review by the IMF and a MEFP updated which describes the policies the government intends to implement and performance criteria attached to them, which have to be fulfilled in order to determine the success of the program. These criteria as well as reporting requirements are defined in the technical memorandum of understanding between the Country and the IMF
During the program implementation, the macro unit and NBR’s departments report weekly, monthly and/or annually the data agreed upon in the Technical Memorandum of understanding to the IMF for the purposes of program monitoring.
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