The government of Zimbabwe has ordered banks to stop lending with immediate effect, seeking to curb its rapid devaluation on the black market.
The country reintroduced a local currency in 2019 after abandoning it in 2009 when it was hit by hyperinflation.
The Zimbabwean dollar, officially quoted at 165.94 against the U.S. dollar, continues to slide on the black market, where it is trading between 330 and 400 to the greenback.
“Lending by banks to both the government and the private sector is hereby suspended with immediate effect, until further notice,” President Emmerson Mnangagwa said.
The President accused unnamed speculators of borrowing Zimbabwe dollars at below-inflation interest rates and using the money to trade in forex.
Reuters reports that other measures include an increased tax on forex bank transfers, higher levies on forex cash withdrawals above $1,000, and the payment of taxes which used to be charged in forex in local currency.
The devaluation of the Zimbabwe dollar’s black market exchange rate, which is used in most financial transactions in the economy, has been driving up inflation.
Year-on-year inflation quickened to 96.4% in April, from 60.6% in January.