Zimbabwe has today received US$961 million from the International Monetary Fund (IMF) under the Special Drawing Rights (SDRs) to combat this unprecedented crisis as the world reels on COVID-19.
In a joint press statement, Finance Minister Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya said the funds are earmarked to provide additional liquidity to the global financial system.
“The immediate impact of the support from the IMF is to increase the foreign exchange reserves position of the country by US$961 million,” Ncube said.
“This will go a long way in buttressing the stability of our domestic currency,” said Mangudya.
Announcing the SDRs worth US$650 billion around the world, Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said the decision on how best to use the allocated funds rests on the member countries.
The Managing Director went on to say that the decisions on how to use the SDRs should be prudent and well-informed.
“To support countries, and help ensure transparency and accountability, the IMF is providing a framework for assessing the macroeconomic implications of the new allocation, its statistical treatment and governance, and how it might affect debt sustainability,” she said.
“The IMF will also provide regular updates on all SDR holdings, transactions, and trading – including a follow-up report on the use of SDRs in two years’ time.”
Ncube said the funds allocated by the IMF will be used prudently and with utmost accountability.
“We would like to express our great appreciation to the IMF for this disbursement which shall be used transparently in line with the IMF guidance note,” he said.
The funds will be used to support the social sectors namely health, education and the vulnerable groups and; also the productive sectors including industry, agriculture and mining.
Other uses of the funds include in infrastructure investment covering roads and housing; and also foreign currency reserves and contigency fund, to support the domestic currency and macro-economic stability.
IMF is distributing SDRs to countries in proportion to their quota shares in the global financial institution.
Georgieva said, “This is just a start, and the IMF will continue to work with our members to build on this effort.”