The Zimbabwean government has officially announced that they have received almost a billion US dollars from the International Monetary Fund via the institution’s Special Drawing Rights (SDR). SDR refers to supplementary foreign exchange reserve assets that are maintained by the IMF and availed to member countries if they so choose. Zimbabwe will probably use the money to shoal up its foreign currency reserves that have been under considerable strain these past five years.
Below is the full statement from the government and the Reserve Bank of Zimbabwe
ON THE RELEASE OF SDR 677 436 012 BY THE IMF TO ZIMBABWE
We would like to advise the public that Zimbabwe has received SDR 677.4 million (USD 961 million) from the International Monetary Fund (IMF) under the IMF’s USD650 Billion SDR allocation earmarked to provide additional liquidity to the global financial system. The funders ere deposted in the Reserve Bank of Zimbabw account with the IMF for value 23 August 2021.
The immediate impact of this support from the IMF is to increase the foreign exchange reserves position of the country by US$961 million. This will go a long way in butttressing the stability of our domestic currency.
The funds will be sued prudently, with utmost accountability, to support social sectors namely health, education and vulnerable groups; productive sectors that include industry, agriculture and mining; infrastructure investment covering roads and housing; and foreign currency reserves and contigency fund, to suppot our domestic currency and macro-economic stability.
We would like to express our great appreciation to the IMF for this disbursement which shall be used transparently in line with the IMF guiance note.
Hon. Pro. M. Ncube
Minister of Finance and Economic Development
Dr J P Mangudya
Reserve Bank of ZimbabweThe full joint statement from the Ministry of Finance and RBZ
In Shona, we have a proverb. Totenda maruva tadya shakata. Roughly translated it means you can never predict a harvest just by looking at how well your fruit trees are flowering. Zimbabwe has taught me to be very skeptical about feel-good announcements involving the government promising grand things.
However, there is reason to be optimistic here. Getting this money means Zimbabwe is coming back from the cold where we have been ever since that fateful suspension from the IMF at the beginning of this century. I am hoping the government will follow through with its promises in order to make sure they remain in good standing with the IMF.