The International Monetary Fund (IMF) may approve an emergency credit of $175 million to prevent the collapse of Malawi's economy.

It is a quick credit, providing quick concessional financial assistance to low-income countries facing an urgent balance of payments need, without conditionality.

The fund, was established under the Poverty Reduction and Growth Trust program as part of a broader reform to make the fund's financial support more flexible and better adapted to the diverse needs of poor countries, including in times of crisis.

The funding is expected to help the country meet urgent financing needs, especially the foreign exchange shortage that has caused stock-outs of fuel and other commodities.

Malawi's Finance Minister, Sosten Gwengwe, said that the amount being approved, amounts to 50% of the total that the country should have access to in loans.

Gwengwe, emphasized that this amount, will help Malawi meet urgent Balance of Payments financing needs and restore macroeconomic stability, in addition to laying the foundation for inclusive growth focused on improving the lives of the Malawian people.

In a statement, the IMF technical mission reconsidered its position, confident in the commitment made by the Malawian authorities to advance structural reforms and lead the country towards macroeconomic stability.

This technical position, however, still needs final approval by the board of the International Monetary Fund.

The commitment also includes a sustainable debt trajectory through the ongoing debt restructuring process.

Malawi is embracing a severe financial crisis, which has led the country into over-indebtedness of 6.38 trillion kwachas.

The country is facing a foreign exchange problem that has led to shortages of basic necessities and high pressure on inflation, which has already reached 25.5 percentage points.