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Fund not impressed with Zim currency reforms

Itai Mushekwe

ZIMBABWE’S currency reforms have failed to win the backing of the International Monetary Fund (IMF), further deepening anxiety over the country’s fate when the Bretton Woods institution’s board meets to review the country’s membership

in November.

An IMF spokesperson told businessdigest from Washington that Zimbabwe’s currency reforms, undertaken as part of broad-based measures to curb hyperinflation, fell far short of addressing fundamental causes of the country’s economic woes.

“The fund has repeatedly urged the Zimbabwean authorities to urgently adopt a comprehensive policy package to address Zimbabwe’s economic crisis,” said an IMF spokesperson.

“The introduction of a new currency in itself does not address the underlying problem. The fund has also called on the government to provide adequate social safety nets and food security to vulnerable groups,” she maintained.

The unfavourable view of the currency reforms by the IMF underline government and the central bank’s apprehension over a planned mission to the country by an IMF team, whose visit was scheduled for early September before a board meeting to review Zimbabwe’s compliance with the institution’s recommendations over the comprehensive policy package to kick-start the economy’s revival.

Both the board meeting and the IMF mission have been moved to November.

Independent economic analyst, John Robertson, said the IMF response to the currency reforms was an indictment of half-hearted government and central bank policies on economic reforms.

“Policy choices made by government have damaged the economy and we can’t ask for assistance in our current economic state,” said Robertson.

“We won’t be deserving support until we change policies affecting us. It’s easy to focus on land and agriculture but every sector has suffered,” Robertson said.

Robertson said the IMF “is not going to take us seriously until we deal with our bad economic policies”. 

The IMF has had a cat-and-mouse relationship with Zimbabwe’s government, which has failed to adopt comprehensive economic policies to take the country out of a seven-year economic recession.

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