President Emmerson Mnangagwa/Bloomberg


Zimbabwean president wants new currency, IMF loan in revival bid

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The state abolished Zimbabwe’s currency in 2009, after an episode of hyperinflation rendered it worthless.

Monday 24, June 2019

(Bloomberg) --Zimbabwean president and his finance chief want a new currency by March, would seek financing from the International Monetary Fund (IMF) and may even consider a eurobond offering as the struggling economy emerges from almost two decades of isolation.

The introduction of a new currency is crucial to his efforts to revive the economy, said Mnangagwa, who secured a five-year term in July elections after the military deposed Robert Mugabe in 2017.

President Emmerson Mnangagwa, said, “It is necessary that we have our own currency, I have faith that we will achieve that even before the end of the year or by the first quarter of next year.”

Since 2019, Zimbabwe has been using a basket of currencies, including neighbouring South Africa’s rand and the US dollar.

Additionally, the South African country has quasi-currencies known as RTGS, which only exist electronically and so-called bond notes, though a persistent dollar shortage has led to a precipitous decline in their value.

President Mnangagwa and his finance minister, Mthuli Ncube, has prepared the ground for a new currency—starting with the first budget surplus he can recall in decades.

“I’ve been in government for 38 years as minister and I cannot remember when you ever had a budget surplus, now, this young man has been able to achieve a budget surplus in less than eight months and it tells me that what he tells me is possibly true on these issues,” Mnangagwa said.

The government last month agreed on measures to re-engage with the IMF for the first time in more than a decade. Under the arrangement, known as a staff-monitored programme, the fund will assess the government’s economic progress by the end of January, added Ncube.

Similarly, the government plans to access bridge financing to clear about $1.2 billion of arrears to the World Bank, African Development Bank and the European Investment Bank Next to restructure debt owed to bilateral creditors.

“The first order of business is to clear the arrears and then move onto phase two, which is the bilateral discussions with the Paris Club, if it works well in the first phase, it’s the same Paris partners who control those two big institutions that I was talking about, said Ncube.

TAGS : currency , IMF, African Development Bank , World Bank, European Investment Bank , Mthuli Ncube, RTGS$

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