Finance and Economic Development Minister Mthuli Ncube and the Reserve Bank of Zimbabwe have been secretly printing Zimbabwe Dollars the Financial Times has reported.

Quoting people familiar with the discussions between Harare and the IMF, the paper said International Monetary Fund was concerned about its latest discovery by  its officials that RBZ  bank had restarted printing the revived Zimbabwe dollar to provide state subsidies to gold producers.
“The money-printing scheme, which went against IMF advice, was designed to incentivise gold exports but hastened a decline in the local currency,” an official was quoted saying.  “The gold subsidy was one of the central reasons that the IMF came to a conclusion that the programme is off-track. The subsidy has now been stopped and a plan to continue monetary reforms without IMF oversight is being crafted.”

The paper reported that officials said the gold subsidy scheme was intended to support miners who are required by the central bank to convert much of their US dollar export earnings at the official exchange rate. Since the US dollar is worth far more on the street, the miners were losing money and the subsidy aimed to reduce this loss and discourage producers from selling their gold on the black market.

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The IMF has issued a damning report on the progress of economic reforms being implemented by the Harare Administration.

Read a snippet of the report below:

Reengagement with the international community continues to face delays. The Zimbabwean government has yet to define the modalities and financing to clear arrears to the World Bank and other multilateral institutions, and to undertake reforms that would facilitate resolution of arrears with bilateral creditors. This continues to constrain Zimbabwe’s access to external official support. As a result, the authorities face a difficult balance of pursuing tight monetary policy to reduce very high inflation and prudent fiscal policy to address the macroeconomic imbalances and build confidence in the currency, while averting a crisis. While the 2020 budget includes a significant increase in social spending, it is likely insufficient to meet the pressing social needs. Absent a scaling up of donor support, the risks of a deep humanitarian crisis are high