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Last Updated: Friday, 19 August 2005, 15:31 GMT 16:31 UK
IMF economic team visits Zimbabwe
Zimbabwe President Robert Mugabe
Will Zimbabwean President Mugabe be smiling after the IMF visit?
The International Monetary Fund (IMF) is making a crucial visit to Zimbabwe on Monday, ahead of a meeting over whether to expel the nation.

The IMF will decide in September if it is to eject the African state for falling $295m (164m; 243m euros) in arrears in its debt payments.

Earlier in August, South Africa agreed to try and help Zimbabwe's economy.

But Zimbabwe's dollar fell to a new low against the US dollar this week, down 23% to 24,025.31 against the greenback.

Black market

Zimbabwe Reserve Bank governor Gideon Gono revealed the visit in the state-controlled Herald newspaper on Friday.

"The nation should not despair but should rededicate itself to responsible behaviour, particularly when it comes to the setting or review of prices of goods and services in the economy," he said.

In a bid to crack down on what the government said was a flourishing black market, the Zimbabwean authorities embarked on an urban clean-up campaign in June - which coincided with the last IMF visit.

A recent United Nations report said 700,000 Zimbabweans had been left homeless or jobless by the operation, which the government said was aimed at getting rid of illegal buildings and businesses.

The South African government earlier this month agreed in principle to an aid package to Zimbabwe.

However, it said any bailout would have to be "within the context of their programme of economic recovery and political normalisation".

South Africa also intimated it may look at taking over the country's debt to the IMF as a means of preventing expulsion.

Exchange boycott

Zimbabwe has fallen behind in its IMF repayments since 2001, and in June the IMF urged it to take "decisive action" to lower its deficit, which has been put at 17-22% of GDP by some economists.

"A rebuilding of relations with the international community is a critical part of the effort to reverse the economic decline," the IMF said on its return from the June visit.

On Tuesday finance minister Herbert Murerwa submitted a supplementary budget to parliament, including new taxes.

On Friday brokers continued their boycott of the Zimbabwean stock market, which trades 79 listed local companies, to protest at plans for a 10% withholding tax on all deals.

Meanwhile on Friday, it was revealed that at a "managed auction" conducted by the nation's central bank a day before, the official rate for the Zimbabwe dollar, worth US$2 at independence in 1980, slid from 18,003 to 24,025 to the dollar.




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