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IMF says Central African Republic to receive $176 mln in aid

Source: Reuters - Thu, 3 Apr 2014 18:49 GMT
Author: Reuters
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WASHINGTON, April 3 (Reuters) - The Central African Republic has reached a preliminary agreement with the International Monetary Fund and other donors to receive about 84 billion CFA francs ($176 million) this year, the IMF said on Thursday.

The Fund said it plans to loan the former French colony 6 billion CFA francs under one rapid loan, and another 4 billion CFA francs under a second loan. Both loans are subject to approval by the IMF's management and board.

The rest of the money will come from the World Bank, African Development Bank, European Union and France, the IMF said.

The IMF money will be made through its Rapid Credit Facility, meant for countries with an urgent balance of payments crisis, often due to outside shocks such as natural disasters and violence.

The aid announcement came as Chad on Thursday said it would withdraw troops from an African Union peacekeeping mission in the Central African Republic, setting back attempts to build a large international force to stem religious conflict in the impoverished nation.

Chad's decision may also hurt France's plans to restore peace in the landlocked nation, which is rich in metal resources but has suffered instability since independence in 1960. The situation worsened about a year ago, after the mostly Muslim Seleka rebels seized power in the majority Christian state.

French and African Union peacekeepers have so far failed to stop the conflict.

"The political and security crises that the CAR has faced since December 2012 has led to a collapse of economic activity, paralyzed the government, and caused an unprecedented humanitarian crisis, with nearly a quarter of the population displaced," IMF mission chief Ekué Kpodar said in a statement.

He said the country's economic output shrank by about 36 percent last year, while inflation sped up to 6.6 percent. In 2014, economic growth should pick up slightly, by about 1.5 percent, as long as security conditions improve, displaced people return and economic activity resumes.

Reuters reported in January that the IMF planned to discuss a new loan program with the Central African Republic once the security situation allowed it, after a new government took office. ($1 = 478.2250 CFA Francs) (Reporting by Anna Yukhananov; Editing by Paul Simao)

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