IMF approves $16.6m loan to Mozambique

WASHINGTON, June 21 (UPI) -- The International Monetary Fund Monday approved a $16.6 million loan to Mozambique to support the government's economic program until 2006.

The country's economic program for 2004 to 2006 aims to secure financial stability and tackle poverty. Money from the IMF will "enhance monetary and exchange rate management in order to achieve the targeted reduction in inflation," the IMF's deputy managing director Takatoshi Kato said.

He added that the Bank of Mozambique, the country's central bank, will be able to use the IMF funds to strengthen monetary control by limiting its intervention in the foreign exchange market to achieving Mozambique's international reserve targets.

The loan comes as part of the IMF's poverty reduction and growth facility, which carry an annual interest rate of 0.5 percent and are repayable over 10 years, with a grace period of five years on principal payments.