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Press Release No. 05/292
December 23, 2005
International Monetary Fund
700 19th Street, NW
Washington, D.C. 20431 USA

IMF to Extend 100 Percent Debt Relief to Ethiopia
Under the Multilateral Debt Relief Initiative

Mr. David Andrews, the IMF Mission Chief for Ethiopia, issued the following statement on December 22, 2005:

"Under the Multilateral Debt Relief Initiative, the IMF Executive Board has approved debt relief for Ethiopia (see Press Release No 05/286). As part of the Initiative, the IMF will provide 100 percent debt relief on all debt incurred by Ethiopia to the IMF before January 1, 2005 that remains outstanding. This amounts to approximately US$161 million, or US$114 million excluding remaining assistance under the Heavily Indebted Poor Countries (HIPC) Initiative. This debt relief should become available in early January as soon as the remaining consents of the contributors to the PRGF Trust Subsidy Account have been received. The international community has made these additional resources available to help Ethiopia make progress toward its Millennium Development Goals (MDGs).

"Ethiopia has qualified for IMF debt relief because of its overall satisfactory recent macroeconomic performance, progress in poverty reduction, and sound public expenditure management. In particular, Ethiopia has recorded two years of high economic growth, and rapidly expanding exports, while containing inflationary pressures. Commitment to adjust policies in response to emerging macroeconomic pressures also provides assurance that macroeconomic stability will be maintained. In addition, efforts to strengthen cash management systems and improve internal control and audit are underway. Performance in these areas provides assurance that resources made available under the Multilateral Debt Relief Initiative will be used effectively.

"The IMF looks forward to working with Ethiopia to help it develop a strong and stable economy and to make sustained progress toward the MDGs," he said.




IMF EXTERNAL RELATIONS DEPARTMENT

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