IMF head of communication Gerry Rice told reporters during a briefing in Washington DC that the Fund’s initial evaluation of currency reforms announced by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya on 20 February was that the measures are “a step in the right direction to address distortions” in the southern African economy.
The RBZ scrapped the peg between Zimbabwe’s quasi-currency – bond note – and the US dollar in February, allowing the local currency’s exchange rate to slide sharply to match its value on a thriving foreign currency black market.
“Its success, of course, the currency reforms’ success will depend on the implementation of an effective overall monetary policy framework supported by market-determined interest and exchange rates, together with prudent fiscal policies,” Rice said.
Rice said the IMF is discussing with the Zimbabwean authorities to ensure that the currency reforms and the country’s Transitional Stabilization Programme are successful.
“We’re engaged with them on how we can help them as much as possible,” the official said.
He spoke in the wake of this week’s meeting between Zimbabwe’s Finance Minister Mthuli Ncube and IMF senior officials led by managing director Christine Lagarde.