The IMF has announced that its board has approved the resumption of the government's standby facility. The IMF reached an agreement in November with the caretaker government to restart the stalled credit.

Under the agreement, the government will receive the two outstanding tranches of the standby facility, each worth about $80 million. The first tranche will be disbursed immediately and the second tranche is scheduled to be paid in January. The board has also approved an increase in its loan programme to the government. A further $231 million will be made available by September 1997.

The agreement sets out new economic targets which include a 5 per cent rate of growth in gross domestic product (GDP) in fiscal year 1996/97. The budget deficit is to be reduced to 4 per cent of GDP. The current account deficit, excluding official transfers, is to be cut to 5.9 per cent of GDP.

The government hopes that the new agreement will pave the way to negotiations on the resumption of an extended structural adjustment facility (ESAF). The first ESAF was cancelled in 1995 due to the government's failure to meet economic targets (MEED 29:11:96).