HARARE - Finance Minister Tendai Biti says that government is withdrawing $110 million from the Zimbabwe General SDR Allocation from the International Monetary Fund to ease the current liquidity crisis inmarket.

Of the amount,only $20 million will be availed to the Reserve Bank of Zimbabwe (RBZ) to enable it to carry out its function as lender of last resort with the balance being allocated as agricultural support, offering lines of credit to industry and infrastructure support.

He said festive season expenditure pressures, high volumes of high transactions compounded by civil service salary payments had caused the challenges.

“It will be necessary that given the high volumes and high value of Budget transactions that Government plays its part with regards to supporting orderly transactions within the financial system,” Biti said.

He warned banks from dragging their feet in remitting payments owed to treasury collected on behalf of the Zimbabwe Revenue Authority (Zimra).

“Zimra has already given each of the concerned banks the necessary initial written warnings, and had demanded immediate remittance of all overdue revenue pay-overs to the Exchequer, as well as written guarantees of timely remittances,” the minister said.

He announced that high value transactions shall be staggered to allow banks sufficient time to plan and introduce a notice period for high value withdrawals from banks.

“Notice periods will be related to the value of the transaction, up to a maximum of seven days,” he said.

He said his ministry would however offer financial instruments in exchange for $83 million owed to banks in statutory reserves by the RBZ, which he said was also contributing to challenges in the sector.

“To facilitate transaction in the money market, Treasury is introducing Discounted and Tradable Paper against Reserve Bank statutory reserve liabilities to banks willing to participate," he said.

“Introduction of this instrument will overcome some of the security challenges banks have been facing with regards to accessing the $7 million Lender of Last Resort funds at the Reserve Bank,” he added.

He said the country had recorded a budget surplus of $30 million for 2011 attributed to increased revenue inflow that surpassed projected figures of $2,7 billion for the period.

“The preliminary annual statements for financial performance for the year ended 31 December 2011 indicates total revenue at $2,921 million and the total expenditure at $2,89 million, resulting in an overall 2011 Budget surplus of
$30,4 million,” Biti said.

“This outturn allowed for Government to post a small positive opening balance which became available for supporting Budget expenditures in January 2012, mainly salaries and pensions payments, at a time when revenue inflows are seasonally low,” he said.

Zimbabwe’s SDR account with the IMF stands at $212 million after drawing down $50 million in December 2009 and a further $100 million in February 2010 in support of various infrastructure projects.