Rwanda has successfully paid off its $400 million Eurobond despite the effects caused by recent events around the globe ranging from the COVID-19 pandemic, the war in Ukraine, and the decline in the value of the country’s currency as against the US dollar.
The payment was possible through the help of the International Monetary Fund (IMF). According to a representative of Rwanda’s Ministry of Finance, the government has earmarked $63 million as part of an allocation gotten from the IMF in 2021 to help the East African nation combat the effects of COVID-19 on the economy.
The finance ministry added that the decision taken by the government has helped the East African nation lessen the risk of the default payment. It has helped the nation to make a successful repayment of 15.1% of the 2013 Eurobond.
This feat was possible for Rwanda courtesy of the $620 million Eurobond that was released in response to the low-interest rate attached to the loan making them pay back a portion of $400 million.
The rate on the 10-year Eurobond of $620 million granted to the nation in April 2021 was 5.5%, unlike the 6.625% rate of 2013. This alone was the determining factor that helped the nation manage its debt.
With the East African nation’s debt increasing to 78.3% from 60.7% of the GDP before the pandemic, the government borrowed in recent years to aid economic and development programs.