The Sunday News
THE International Monetary Fund has hailed Zimbabwe’s recently announced monetary policy which liberalised the exchange rate between the US dollar and the RTGS dollar, adding this was a step in the right direction in the country’s quest to achieve macro-economic stability.
Reserve Bank of Zimbabwe Governor Dr John Mangudya last month announced a largely economic friendly monetary policy which abandoned the 1:1 rate between the bond and the RTGS dollars and introduced a floating system in the trading of foreign currency.
He also announced a raft of measures aimed at bringing stability in the financial sector such as the introduction of lines of credit to support foreign exchange regime. Dr Mangudya also announced that the bank will continue to support importation of critical goods such as fuel and cooking oil.
Addressing the press last week, a spokesman for the IMF Mr Gerry Rice said the new measures were a step in the right direction. Mr Rice was commenting after Finance Minister Professor Mthuli Ncube met with IMF chief Mrs Christine Largade in the United States of America to update her on the economic development in the country.
“Maybe just a comment on the currency reform, if that would be helpful. And 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 that I’ve mentioned. 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,” he said.
Mr Rice said IMF would continue to help Zimbabwe to achieve its macro-economic stability.
“The IMF is trying to help. We’re engaged with them on how we can help them as much as possible.”
He said Prof Ncube discussed a number of issues with senior IMF personnel on the economic developments and the reforms that Harare has implemented over the months.
Mr Rice, however, maintained that IMF was not yet in a position to extend lines of credit to Zimbabwe, adding, “though we continue to have discussions with the authorities to assist them in implementing the economic reforms contained in their Transitional Stabilisation Programme, which you know.”