Zim maintains reserves of $130m from SDR

via Zim maintains reserves of $130m from SDR | The Herald August 27, 2015

ZIMBABWE is maintaining foreign exchange reserves of $130 million from the $500 million general Special Drawing Rights (SDR) released by the International Monetary Fund to cushion member countries from the global financial crisis more than six years ago.

Under the SDR allocations the IMF injected more than $280 billion to show up member countries’ foreign exchange reserves following a debilitating global financial crisis that wiped out countries’ reserves.

“From that $500 million they have kept $130 million and they are using that as reserves,” IMF resident representative Mr Christian Beddies said yesterday.

Zimbabwe received about $512 million under the SDR allocations which was based on the country’s quota with the IMF. The quotas were based on the size of a country’s economy in relation to the global economy.

Government, through the Ministry of Finance and Economic Development said during the remainder of this SMP, Government will continue to treat current SDR holdings as core international reserves.

Mr Beddies said Zimbabwe is making token payments to the IMF and other international financial institutions, which has kept the country’s debt with the IMF in check.

Zimbabwe is making about $150 000 a month and the total debt to the IMF is about $111 million.

“Because of the token payments it (the debt) is not increasing,” he said.

An IMF mission will arrive in the country on Sunday to undertake the Second Review of the Staff Monitored Programme.

During the review, the IMF mission in conjunction with the Ministry of Finance and Economic Development and the Reserve Bank of Zimbabwe will organise a round table discussion with participants drawn from public and private sectors, NGOs, and development partners. The discussion will focus on economic prospects for Zimbabwe and the Re-engagement Process.

“In terms of reforms the SMP appears to be on track but again the mission will have to establish that firmly,” said Mr Beddies.

The Mission will engage over the period August 31-September 11, 2015.

The main purpose of the Mission’s visit is to review progress by the authorities under the Staff Monitored Programme.

In addition, the Mission will also look at economic performance to date and update the macro-economic framework as needed.

However, Government is confident that all the June targets it set in the SMP were met.

Finance and Economic Development permanent secretary Mr Willard Manungo told business executives at the Confederation of Zimbabwe Industries meeting recently that Government is in constant dialogue with all the international financial institutions.

“The June targets in terms of our appreciation of the requirements, we are on track. We are having a fund mission to confirm that we actually met the targets for June. That will bring a track record that is required for serious discussion on debt relief,” said Mr Manungo.