The Reserve Bank of Zimbabwe has lifted a 10-day temporary ban of lending services by banks.
President Emmerson Mnangagwa announced the ban in a bid to halt the runaway depreciation of the Zimbabwe dollar. However, it quickly chilled economic activity, with agri-processing companies including sugar mills saying they couldn’t advance funds to farmers to grow their crops.
The ban led to a gradual relaxation, with the government first saying it didn’t apply to commodities and thereafter allowing citizens with access to foreign currency to import their own goods.
Nevertheless, the ban has had little impact on the exchange rate, allowing, instead, the government to scapegoat the private sector for its collapse, which has pushed inflation to 96%.
The Zimbabwe dollar is currently trading as low as 420 to the greenback on the black market, similar to its level before the ban was announced. The official rate is 173 to the dollar, down from 166.
Year-on-year inflation quickened to 96.4% in April, from 60.6% in January.