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Mboweni denies $1bn loan for Zimbabwe
Kevin O’Grady, Business Day (SA)
August 25, 2005

http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A84237

RESERVE Bank governor Tito Mboweni lashed out yesterday at the instigators of a "media frenzy" over claims of a proposed $1bn bale-out for Zimbabwe, saying no such loan had been discussed.

This is the first categorical denial, from either the Reserve Bank or government, of such a loan, which is reportedly being negotiated in return for the fulfilment of certain conditions by the Zimbabwean government. Addressing shareholders at the Bank annual general meeting yesterday, Mboweni said there had been discussions between South African and Zimbabwean officials.

"But it’s not true that these talks centred on $1bn, or that they centred on any funds going to Harare," he said. The figure was a "creation of Dumisani Muleya in Harare". Muleya is Business Day’s Harare correspondent.

Elaborating at a later news conference, Mboweni said discussions with his Zimbabwean counterpart, Gideon Gono, had been going on for "a long time", mainly on "what kind of economic policy might be appropriate for our respective countries".

"There have been discussions around what policies need to be undertaken to help boost (Zimbabwe’s) economic performance, control inflation and bring about a stable exchange rate (and), more importantly, what to do to avoid a possible expulsion of Zimbabwe from the International Monetary Fund (IMF)."

This included possibly assisting Zimbabwe with its arrears to IMF, which were in the region of $295m.

"Those discussions are ongoing; there has been no conclusion," Mboweni said.

Reports have suggested that SA has already signed a provisional memorandum of understanding with Zimbabwe for a $1bn credit facility, with certain conditions attached.

These include that Zimbabwean President Robert Mugabe restore the rule of law, restart talks with the opposition Movement for Democratic Change, lift restrictions on the media, and stop Operation Restore Order, a controversial urban clean-up campaign.

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