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Bankers Say Zimbabwe Drew Foreign Currency From Corporate Accounts to Pay Debt

Zimbabwe's central bank took foreign currency from the accounts of private corporations to pay some of its debt to the International Monetary Fund, which has threatened to expel Zimbabwe for failure to pay down its debt.

Central Bank Governor Gideon Gono says Zimbabwe's repayment of $120 million, less than half its debt to the IMF, was drawn from exporters and others with foreign currency reserves.

This week, many exporters say, they found their foreign currency accounts empty. They say they use that money to import spare parts and components for manufacture.

Officials from two foreign-owned banks in Zimbabwe, who insisted on anonymity, confirmed that the Central Bank drew on the foreign currency accounts.

An IMF team has been in Zimbabwe, holding consultations with representatives of both the public and private sectors.

In a week, Zimbabwe will find out whether it will be allowed to remain a member of the IMF, or if it will be expelled. Even if it has paid a substantial part of its $295 million debt, the IMF will have to decide whether Zimbabwe is prepared to implement many reforms it has promised, but so far failed to carry out.

South Africa has offered Zimbabwe a loan to pay off its IMF debt, but on condition that Harare carry out political and economic reforms. Zimbabwe Justice Minister Patrick Chinamasa told parliament this week that Zimbabwe would never accept any conditional loan.

Veteran economist John Robertson said Friday the Zimbabwe government is reckless not to accept the South African loan, as the economy nose-dives. He says inflation is on track to reach 1,000 percent by the end of the year.

The value of the Zimbabwe dollar on the black market, where most trading takes place, slumped by a further 20 percent this week. And, supermarkets hiked prices again on Thursday.

Thabitha Khumalo, a member of the executive of the Zimbabwe Congress of Trade Unions, says further job losses can be expected if exporters lack the foreign currency to keep the productive sector supplied with imports.