IMF hails Zimbabwe currency reforms as step in the right direction

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IMF hails Zimbabwe currency reforms as step in the right direction

AFRICA / 8 MARCH 2019, 3:59PM / ANA REPORTER

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Zimbabwe needs an effective overall monetary policy framework if its currency reforms move is to succeed, the IMF has said. Picture: Reuters/Philimon Bulawayo

Harare ‑ Zimbabwe needs an effective overall monetary policy framework if its currency reforms move is to succeed, the International Monetary Fund (IMF) has said.

Addressing the media Thursday in Washington DC, the United States, Gerry Rice, from the IMF communications department, said the Zimbabwe’s monetary policy framework should be supported by market-determined interest and exchanges rates, together with prudent fiscal policies.

 

“And our initial evaluation of (the monetary policy) which has been announced by the Zimbabwean authorities recently is that it’s a step in the right direction to address distortions that have significantly impaired those macroeconomic outcomes...,” he said.

Asked what Zimbabwean finance and economic development minister Mthuli Ncube had discussed with IMF managing director Christine Lagarde, Rice said Ncube briefed Lagarde on economic developments and reforms in the investment-hungry country.

Rice said at present, the IMF did not have a financing programme with Zimbabwe, though they would continue to have discussions with the authorities to assist them in implementing the economic reforms contained in their transitional stabilisation programme.

“(The transitional stabilisation programme) is a wide ranging stabilisation and reform programme aimed at addressing what is clearly a deep macroeconomic imbalance challenge, as well as a broader set of social and economic challenges. So the...discussions are certainly continuing,” he said.

Rice said given the absence of a financing programme, future plans would depend on clearance of arrears to other international financial institutions and financing assurances from bilateral predators, agreement on policies and many such arrangements.

African News Agency (ANA)

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s://www.newsday.co.zw/2019/03/imf-puts-caveat-on-zim-currency-reforms/....

IMF puts caveat on Zim currency reforms

By Newsday

 

- March 11, 2019

 

 

 

 

 

 

BY FIDELITY MHLANGA

THE International Monetary Fund (IMF) says the success of currency reforms will depend on the implementation of an effective monetary policy framework supported by market-determined interest rates and prudent fiscal policies.

According to an IMF Press briefing held last week after Finance Minister Mthuli Ncube met IMF director Christine Lagarde in Washington DC, government’s removal of the 1:1 parity that existed between the bond currency and US dollar last month is a step in the right direction that potentially can address distortions that were compromising the economy.

“Our initial evaluation of that which has been announced by the Zimbabwean authorities recently is that it’s a step in the right direction to address distortions that have significantly impaired those macro-economic outcomes,” said IMF director of communications, Gerry Rice.

“Its success, of course, the currency reforms’ success, will depend on the implementation of an effective overall monetary policy framework supported by market-determined interest and exchange rates, together with prudent fiscal policies. So it’s the major set of challenges facing Zimbabwe. The IMF is trying to help. We’re engaged with them on how we can help them as much as possible.”

“Zimbabwe has no financing programme with the IMF, but we’re looking to be supportive as we can, and so stay tuned for further developments,” he said.

 

Ncube was in Washington DC where he briefed Largade and other financiers about the economic developments in the country.

Ncube is canvassing for support for a plan to clear some $2 billion in arrears owed to the World Bank and the African Development Bank (Afdb) as part of the 2015 Lima plan, critical to secure fresh lines of credit and restore confidence in the market.

“As we said in the statement that we issued, the minister briefed Madam Lagarde on economic developments in Zimbabwe and the reforms that you refer to that have been implemented since they last met. As you know — well, maybe people don’t know — but the fund does not have a financing programme with Zimbabwe, though we continue to have discussions with the authorities to assist them in implementing the economic reforms contained in their transitional stabilisation
programme, which is a wide ranging stabilisation and reform programme aimed at addressing what is clearly a deep macro-economic imbalance challenge, as well as a broader set of social and economic challenges. So the discussions are on — we’re engaged. The discussions are certainly continuing,” said Rice.

Ncube is working on a Transitional Stabilisation Programme which seeks to undertake reforms, such as improving the ease of doing business,
improving competitiveness, opening the country to international investors and financiers.