HARARE (Reuters) – Zimbabwe’s authorities on Saturday ordered banks to cease lending with rapid impact in a transfer Harare mentioned was designed to cease hypothesis towards the Zimbabwean greenback and was a part of a raft of measures to arrest its speedy devaluation on the black market.
The southern African nation reintroduced an area forex in 2019 after abandoning it in 2009 when it was hit by hyperinflation.
Nonetheless, the Zimbabwean greenback, which is formally quoted at 165.94 towards the U.S. greenback, has continued to slip on the black market, the place it’s buying and selling between 330 and 400 to the dollar.
The black market change fee has moved from about 200 Zimbabwe {dollars} in the beginning of the yr.
President Emmerson Mnangagwa on Saturday introduced measures he mentioned had been meant to arrest the forex’s depreciation, which he mentioned threatened Zimbabwe’s financial stability.
“Lending by banks to each the federal government and the personal sector is hereby suspended with rapid impact, till additional discover,” Mnangagwa mentioned in a press release.
He accused unnamed speculators of borrowing Zimbabwe {dollars} at below-inflation rates of interest and utilizing the cash to commerce in foreign exchange.
Different measures embody an elevated tax on foreign exchange financial institution transfers, increased levies on foreign exchange money withdrawals above $1,000, and the cost of taxes which was once charged in foreign exchange in native forex.
The devaluation of the Zimbabwe greenback’s black market change fee, which is utilized in most monetary transactions within the financial system, has been driving up inflation.
Yr-on-year inflation quickened to 96.4% in April, from 60.6% in January.
Reporting by Nelson Banya; Enhancing by David Holmes
