The Zimbabwean government on Saturday ordered banks to immediately stop lending, which Harare said was designed to stop speculation with the Zimbabwean dollar and was part of a series of measures to halt its rapid devaluation on the black market.

The South African country reintroduced the local currency in 2019 after abandoning it in 2009 when it suffered from hyperinflation.

However, the Zimbabwean dollar, which is officially quoted at 165.94 against the US dollar, continued to slide on the black market, where it traded between 330 and 400 dollars.

At the beginning of the year, the black market shifted from about 200 Zimbabwe dollars.

President Emerson Mnangagwa on Saturday announced measures he said were aimed at halting the depreciation of the exchange rate, which he said threatens Zimbabwe’s economic stability.

“Lending by banks to both the government and the private sector will cease with immediate effect until further notice,” Mnangagwa said in a statement.

He accused unnamed speculators of borrowing Zimbabwean dollars at interest rates below inflation and using that money to trade the foreign exchange market.

Other measures include raising the tax on bank transfers to forex, higher fees for withdrawing forex cash in excess of $ 1,000 and paying taxes that were previously levied in local currency.

The devaluation of the Zimbabwean dollar black market, which is used in most financial transactions in the economy, has contributed to rising inflation.

On an annualized basis in April, inflation rose to 96.4% from 60.6% in January.

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