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More IMF joy for Zimbabwe

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Zimbabwe’s coffers have been boosted after the country got access to $91,2 million, which had been held for seven years pending the settlement of overdue obligations to the International Monetary Fund (IMF).

BY BUSINESS REPORTER

Last week, Zimbabwe cleared its overdue obligations to IMF, when it paid $107,9m after drawing down its special drawing rights (SDR) holdings kept at the fund.

SDRs act as reserves for member countries.

The payment unlocked the SDR 66,4 million ($91,2m), which has been held in an escrow account pending the clearance of Zimbabwe’s arrears to the Poverty Reduction and Growth Trust (PRGT).

IMF resident representative to Zimbabwe, Christian Beddies confirmed that Zimbabwe had accessed the escrowed money.
“. . . the amount held in escrow is indeed SDR 66,4 million, which became available to Zimbabwe after settling the overdue obligations,” he said.

Beddies said after the settling of the PRGT arrears using SDRs, Zimbabwe now has a balance of SDR 80,4 million (about $110 million) in SDR holdings.

In 2009, IMF gave Zimbabwe $510m under a $283 billion facility given to member countries to bolster their reserves devastated by the global financial crisis.

IMF said the clearance of the PRGT arrears would not result in direct financing, as the executive board has to lift the remaining remedial measures imposed on Zimbabwe because of the arrears.

It said the process required Zimbabwe to clear arrears to other international financial institutions — the African Development Bank (AfDB), the World Bank, and the European Investment Bank (EIB); to have a commitment by bilateral creditors to provide a debt treatment, in line with applicable IMF policies; and to implement strong fiscal adjustment and structural reforms to restore fiscal and debt sustainability and foster private sector development.

Zimbabwe owes AfDB ($601m), the World Bank ($1,1bn) and $240m to EIB.

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