IMF rules out new loans for RBZ

The International Monetary Fund has said that it will not be offering fresh funding to the Reserve Bank of Zimbabwe as the country is overextended.

IMF is “precluded from providing financial support to Zimbabwe due to unsustainable debt and official external arrears” said Dhaneshwar Ghura, leader of a recent IMF mission to Zimbabwe.

In their IMF said that RBZ’s efforts to stabilise the economy are on course and the country has shown resilience in the face of compound challenges.

https://zimbabwenow.co.zw/articles/444/imf-staff-concludes-staff-visit-to-zimbabwe

“Zimbabwe’s economy has shown resilience in the face of significant shocks. Russia’s war in Ukraine, the poor rainfall, and price pressures are adversely affecting economic and social conditions in Zimbabwe, already battered by the COVID-19 pandemic,” reads the report.

The IMF reduced GDP growth forecast citing a number of challenges.

“Renewed price and exchange rate depreciation pressures emerged, notably in the second quarter of 2022, with inflation in August reaching 285 percent over a year earlier.

“After rising to about 7 percent in 2021, real GDP growth is expected to decline to about 3½ percent in 2022 reflecting a slowdown in agricultural and energy outputs owing to erratic rains and rising macroeconomic instability, amidst a recovery in mining and tourism.

“Uncertainty remains high, however, and the outlook will depend on the evolution of external shocks, the policy stance, and implementation of inclusive growth-friendly policies,” reads the report.

The mission also advised that RBZ liberalises the foreign-exchange market.