Press Release No. 06/45

Press Release: IMF Executive Board Upholds Sanctions Against Zimbabwe

March 8, 2006

The Executive Board of the International Monetary Fund (IMF) met today to review Zimbabwe's overdue financial obligations to the Fund and consider the sanctions imposed on Zimbabwe. The Board noted that as a result of Zimbabwe's full settlement of its arrears to the IMF's General Resources Account (GRA),¹ the Managing Director had withdrawn his complaint with respect to compulsory withdrawal (see Press Release No. 06/33). Following the discussion, the Executive Board decided not to restore Zimbabwe's voting and related rights and not to terminate its ineligibility to use the general resources of the Fund at this juncture.

The Board also considered issues related to Zimbabwe's outstanding arrears to the Poverty Reduction and Growth Facility (PRGF)-Exogenous Shocks Facility (ESF) Trust Fund.² It noted that Zimbabwe's economic crisis calls for urgent implementation of a comprehensive policy package comprising several mutually reinforcing actions in the area of macroeconomic stabilization and structural reforms. The Board urged Zimbabwe to continue its efforts to resolve the remaining overdue financial obligations to the PRGF-ESF Trust, and agreed that the Fund will consider further Zimbabwe's overdue financial obligations to the PRGF-ESF Trust within six months of the date of this decision.

Because GRA and PRGF arrears are subject to separate legal frameworks, the various decisions taken by the Executive Board to address outstanding arrears to the PRGF-ESF Trust remain in place. Therefore, Zimbabwe remains excluded from the list of PRGF-eligible countries (see Press Release No. 01/40).

Zimbabwe has been in continuous arrears since February 2001 and is the only case of protracted arrears to the PRGF-ESF Trust, which currently amount to SDR 83 million (about US$119 million).